Cross-country analysis of efficiency and productivity in the biotech industry: An application of the generalized metafrontier malmquist productivity index

Abstract

The study investigates the productivity of 356 Biotech enterprises spanning 12 countries worldwide from 2001 to 2007 with a newly developed generalized metafrontier Malmquist productivity index (gMMPI) framework. The results suggested that the X inefficiency is prevalent in the current developmental phase of the Biotech worldwide, while the levels of technology vary substantially across enterprises and geographical regions. Moreover, the gMMPI decomposition manifests that the productivity growth in the Biotech is mainly driven by the efficiency change, with an annual rate 20.64%. Meanwhile, the existing technologies continuously try to catch up with the grand technology, and the potential room for a further technological progress has also been advanced.