A regional analysis of Spanish manufacturing firms for the period 2004-2009: A northeast/southwest pattern

This paper analyses the technical efficiency of manufacturing firms located in different regions of Spain for the period 2004-2009. Spanish manufacturing firms were grouped using cluster methods. Firms located in north-eastern regions such as Catalonia or the Basque Country show higher levels of R&D, pay higher wages, and are larger than firms located in southern or western regions such as Andalusia or Extremadura. Furthermore, we found that larger firms with more than 500 workers are grouped with the highest levels of R&D, the highest labour costs, and the largest size in terms of number of workers. The results obtained with the Stochastic Frontier methodology allow us to analyse the parameters for those regions whose firms are more efficient. The results reinforce the idea of north-east manufacturing firms a higher level of technical efficiency with respect to those firms located in the south-west.