Spatial inefficiency o f production in small areas in Greek economy

Abstract

The aim of this paper is the analysis of spatial structure of business activity in Greece. Firstly, the concepts of small area and spatial efficiency are defined. Then DEA methodology is applied on spatially aggregated business data and finally global and local Moran coefficients are estimated on efficiency scores. Conclusions for the spatial interdependencies and the structure of regional economies are extracted on the basis of the spatial distribution of efficiency. The structure of Greek economy is not competitive and has polar characteristics. Small areas are grouped into homogenous clusters and form micro regions with similar characteristics of competition. Small areas with low technical efficiency operate usually in competitive environment, while more technically efficient small areas form clusters with characteristics of incomplete competition, enveloped by less efficient small areas. Finally, efficient small areas are located mainly in Attica and Salonica.