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Technical efficiency (TE) of small and medium (SME) food enterprise in West Malaysia


The study focused on measuring the technical efficiency of small and medium enterprises (SME) in the food processing industry. A total of 158 companies were involved and data were analysed using Frontier 4.1. The majority of the companies (96.84%) attained a level of technical efficiency of around 80%.Production elasticity of the sample companies was estimated at 0.9957 indicated that the sample companies were operating at slightly decreasing return to scale. At this stage, an introduction of new innovation in technology, usage of machinery or optimum scale of production is required in order to improve productivity.

 
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