Efficiency and Productivity of Italian Theatrical Firms. A Non-parametric Approach

This work evaluates the efficiency and productivity of a set of 126 Italian theatrical firms over the period 2006–2014, using FDH, DEA and Malmquist total factor productivity (TFP) index. We measure an output-oriented technical efficiency (TE) assuming that Italian theatres maximise their operating revenues by the given labour and capital inputs. Public subsidies at firm level, various firm’s characteristics and geographical location are included as potential efficiency determinants in a second-stage Double-Bootstrap (DB) DEA. The results demonstrate that PA firms are considerably inefficient, with the FDH TE of 0.32, the naïve DEA TE score of 0.28 and average bias-corrected DEA TE score of 0.25, while the bias-corrected scale efficiency (SE) is 0.84. There are also considerable differences between different groups of theatres, with theatre production companies being the least technically and scale efficient. We also found that public support increases efficiency of Italian theatrical firms, thus excluding rent-seeking behaviours of theatre management. Moreover, younger theatrical companies, and those organised as corporations are more technically efficient than older theatres and those organised in other legal forms. Theatres in the South of Italy are less efficient than those located in the North as expected. Moreover, total factor productivity increased only slightly in the Italian theatres and the main driver for this increase was technological change as opposed to TE or SE changes.