Measuring regional efficiency. A method tested on the fabricated metal products industry in Sweden 1973-75
This paper presents a method of measuring the efficiency of regions as production environments of manufacturing industries. The approach is a rather general view of the firm in a market economy. The functions which the firms must perform
are discussed. From that, hypotheses are made regarding the elements of the environment which should constitute the regional production milieu and thus influence the efficiency of the firms. By way of factor analysis the original variables are reduced to seven
regional factors, which are put into productivity functions where their parameters are estimated. From those parameters indexes of regional efficiency are calculated.