Industrial Sector Exports in Colombia: Efficient Frontier Analysis

Jorge A. Restrepo MInstitución Universitaria Autónoma de las Américas

Lorenzo Portocarrero Sierra.Institución Universitaria Tecnológico de Antioquia

Juan Gabriel Vanegas L.Institución Universitaria Tecnológico de Antioquia

• Abstract

• Theoritical Background

• Methodology

• Results

• Conclusions

Schedule

• In this paper, a comparative analysis is carriedout among the industrial sectors in Colombiathat have the most employees during 2000-2011. A dynamic simulation is used, and aData Envelopment Analysis (DEA) is applied inorder to obtain an overall index of technicalefficiency in Colombia's industrial sectors forthe use of resources. Similarly, an industrialsector efficiency ranking for exports is drawnup. This index determines the presence ofunused resources, which is useful to devisestrategies to support exports.

Abstract

• The analysis is based on a Monte Carlosimulation forecast to determine the averagevalues of the period for the input variables:number of businesses, employees, assets, andenergy used to produce the output variables.That is, gross production and exports. Thepurpose is to compare the effectiveness of thefactors of production to generate exports, anddetermine the possibility of improvinginefficient sectors. The goal is to participate inthe internationalization process in a properway.

Abstract

Pro

du

ctiv

ity

Ass

esm

en

t

Partial

Global

Frontier Analysis

Parametrics

Estocastic Frontiers Bayesian Estimation

No Parametrics DEA

Other Analysis

Parametrics Index Number Teory

Malmquist

Divisia + TornqVist

No ParametricsMedia Function

Amswer

Multifactorial

Parametrics Techniques: They

do not require a function that

relates the inputs and outputs

No Parametrics Techniques:

Not require a specific function

Flexible Ausencia de errores de

especificación

Información particularizada para cada

UTD

EficcientTechniqueAssesment

General Context

Farrel (1957)

He established the conceptual basis for the

measurement of efficiency

The differentiate technical efficiency and prices.

Production function, estimation problems

He felt the production function from the

observation of actual units of production

Origin empirical production function and the

concept of relative efficiency

General Context

Technical efficiency

Quantifies the capacity of a production unit to generate the

maximum possible amount of goods using the minimum amount of

resources

General Context

Oriented Input: it

measures the

ability of a unit to

generate the

largest amount of

goods using a

fixed amount of

resources

Oriented output:

measures the

ability of a unit to

produce fixed

assets (or

services) using

the fewest

possibleresources

Nonparametric method: it does not presuppose the existence of an f

(Inputs, Outputs).

No statistical: assumes not captured efficiency to follow some kind of

probability distribution

Efficiency price: It measures a

company's ability to produce

goods/services with a maximum

total value through the use of

resources at the minimum

possible cost.

General Context

Input orientation: The ability

of a company to produce

goods with the highest

possible value using a

quantity fixed resources.

Output orientation: The ability

of a company to produce a

quantity fixed assets using

resources with the lowest

possible value.

It means to achieve the minimum

cost of producing a given level of

product when the proportions of

the factors of production used are

modified.

General Context

Fuente; Mercado et al (1998)

Objetivo: medir la eficiencia productiva de ocho Unidades: A, B, C, D, E, F, G y H

The analysis is based on a Monte

Carlo simulation forecast to

determine the average values of

the period for the input variables

Methodology

Inputs

NB: número de establecimientos,

EM: personal ocupado,

AS: activos y

EU: energía consumida

Outputs

GP: producción bruta y

EX: exportaciones.

The purpose is to compare the effectiveness of the factors of production to generate

exports, and determine the possibility of improving inefficient sectors. The goal is to

participate in the internationalization process in a proper way.

NEPOATEC

PBEX

Methodology

Sector Sector's Description

CIIU15 Production of Foodstuffs and Beverages

CIIU24 Manufacturing of Chemical Substances and Products

CIIU17 Manufacturing of Textile Products

CIIU25 Manufacturing of Rubber and Plastic Products

CIIU26 Manufacturing of Other Non-Metallic Mineral Products

CIIU36 Manufacturing of Furniture; Manufacturing Companies

CIIU28Manufacturing of Products Made of Metal, except Machinery and Equipment

CIIU29 Manufacturing of Machinery and Equipment

CIIU22 Editing, Printing and Record Playing Activities

CIIU21 Manufacturing of Paper and Paper Products

ResultsInputs Outputs

Sector NB EM AS EU EX GP

Sectors analyzed with more than 20,000 employees

CIIU15 1.771 152.675 27.407 3.102 4.768 53.715

CIIU24 827 75.554 13.496 1.769 3.053 23.390

CIIU18 1.021 60.705 1.672 130 540 5.197

CIIU25 775 53.208 6.557 1.198 751 8.099

CIIU17 419 45.972 4.635 897 564 4.873

CIIU26 499 38.502 12.022 1.716 470 9.687

CIIU28 740 37.162 2.066 241 278 4.339

CIIU36 698 33.976 1.610 195 375 3.231

CIIU22 683 33.115 2.859 181 186 4.322

CIIU29 585 31.246 1.928 148 409 3.652

CIIU19 410 21.146 602 94 260 1.574

Results

Sector 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

CIIU15 1,0000 1,0000 1,0000 1,0000 1,0000 1,0000 1,0000 1,0000 1,0000 1,0000 1,0000 1,0000

CIIU18 1,0000 1,0000 1,0000 1,0000 1,0000 1,0000 1,0000 1,0000 1,0000 1,0000 1,0000 1,0000

CIIU24 1,0000 1,0000 1,0000 1,0000 1,0000 1,0000 1,0000 1,0000 1,0000 1,0000 1,0000 1,0000

CIIU17 0,5603 0,5786 0,5406 0,5302 0,5534 0,5497 0,6212 0,8117 0,8443 0,6360 0,5659 0,5627

CIIU25 0,5917 0,6329 0,6322 0,6093 0,6260 0,7553 0,7443 0,7045 0,7314 0,6338 0,6812 0,6050

CIIU26 0,6699 0,7238 0,7335 0,7402 0,7274 0,6897 0,7177 0,7503 0,7102 0,6698 0,6812 0,7152

CIIU36 0,6694 0,6126 0,6630 0,6630 0,6337 0,6871 0,9571 0,7328 0,9341 0,8980 0,9005 0,8474

CIIU22 1,0000 1,0000 1,0000 1,0000 1,0000 1,0000 1,0000 1,0000 1,0000 1,0000 1,0000 0,9713

CIIU28 0,7461 0,7938 0,8316 0,8316 0,8575 0,9362 0,9712 1,0000 0,9883 0,8885 0,9005 0,8665

ResultsSector NE PO AT EC EX PB

CIIU15 1.771,00 152.675,00 27.407,37 3.102,46 4.767,82 53.715,18

CIIU24 827,00 75.554,00 13.495,92 1.768,66 3.053,18 23.389,80

CIIU18 1.021,00 60.705,00 1.671,57 130,45 539,55 5.197,12

CIIU25 434,74 32.191,90 3.967,32 441,74 751,22 8.099,34

CIIU17 235,78 18.688,91 2.608,45 321,52 564,27 4.872,76

CIIU26 319,40 27.534,75 4.942,89 559,53 859,87 9.687,47

CIIU28 510,57 32.201,47 1.790,06 177,21 419,00 4.339,23

CIIU36 462,00 28.790,53 1.364,62 142,34 375,20 3.312,50

CIIU22 510,25 32.166,16 1.781,22 176,20 417,53 4.322,43

CIIU29 585,00 31.246,00 1.927,67 148,17 409,16 3.652,15

Porcentajes de Mejora por sector

CIIU15 0,00% 0,00% 0,00% 0,00% 0,00% 0,00%

CIIU24 0,00% 0,00% 0,00% 0,00% 0,00% 0,00%

CIIU18 0,00% 0,00% 0,00% 0,00% 0,00% 0,00%

CIIU25 43,91% 39,50% 39,50% 63,12% 0,00% 0,00%

CIIU17 43,73% 59,35% 43,73% 64,17% 0,00% 0,00%

CIIU26 35,99% 28,48% 58,89% 67,39% 83,13% 0,00%

CIIU28 31,00% 13,35% 13,35% 26,41% 50,77% 0,00%

CIIU36 33,81% 15,26% 15,26% 27,16% 0,00% 2,52%

CIIU22 25,29% 2,87% 37,70% 2,87% 124,03% 0,00%

CIIU29 0,00% 0,00% 0,00% 0,00% 0,00% 0,00%

Resultas

The case of the SECTORS: CIIU25; CIIU17; CIIU26; CIIU28; CIIU36 and

CIIU22; they have been inefficient in 2011.

NB:419 EM:45.972AS:4.653MM

EU:897MM

GP:4.873MMEX:564MM

NB:43.73%->183EM:59.35%->27.283AS:43%.>2.027MMEU62.52%->576MM

NB:236EM:18.688:AS:2.208MMEU:321MM

CIIU1

7

• It conducted a comparative analysis between the industrialsectors of Colombia most employers in the period 2000-2011; through the dynamic simulation and the DEA (dataenvelope analysis) technique, was a global index oftechnical efficiency of industrial sectors in Colombia,showing that more than 60% of the analyzed sectors areinefficient in the use of NE; PO; EN and EC to generate PBand EX; which leads to problems of internationalcompetitiveness. This rate determines the presence of idleresources on scanned Inputs, useful information in thedesign of strategies to support the industrial sector to facethe signing of FTA and improve the possibilities ofexporting.

Conclusions

• The colombian manufacturing system, as a whole it isinefficient, intends the measurement of efficiencywith the countries which signed FTA to establishpolicies and government plans to face internationalcompetition.

• Continuous demonstrations and stoppages of theconveyor and agricultural sector, it is necessary toaddress efficiency diagnostics, micro-level, to enrichthe discussion of the competitiveness of the differentsectors of the Colombian economy.

CONCLUSIONS