This paper analyzes the efficiency of the Tunisian manufacture sector using non-convex frontier methods. More specifically, it analyzes the total cost inefficiency and proposes its new decomposition into three additive components: short-run variable cost inefficiency; capacity utilization of fixed inputs, and scale inefficiency. The last two components correspond to the longrun cost efficiency concept. This exercise is applied to all the data in the Tunisian manufacturing industry. The results confirm the existence of significant cost inefficiency coefficients related to both long- and short-run analyses.
Keywords: Capacity Utilization, Data Envelopment Analysis, Efficiency, Non-convex Frontier
