Efficiency Estimation Of The Metallurgy Sector In Colombia: Stochastic Frontier Analysis

This paper evaluates the performance of the metalworking sector in Colombia, between 1998 and 2007, using stochastic frontier techniques (SFA), which, through the estimation of the deviations from an ideal function of costs, measure levels economic efficiency of various production units. The results indicate significant differences in the performance of the 12 departments included in the analysis, suggesting that each could achieve significant gains in terms of cost reduction if the production units were closer to the production levels of operation of the more efficient. Additionally, we find that during the period of analysis there is a significant change in the cost efficiency of the sector. Said efficiency can be explained by the impact, the production units of the sector, and the economic crisis in the country in the late nineties.