Impact%20of%20Governance%20on%20the%20Efficiency%20of%20Firms

Impact%20of%20Governance%20on%20the%20Efficiency%20of%20Firms

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Impact of Governance on the Efficiency of Firms within the Formal Economy
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Why is the achievement of “efficiency” important? Efficiency gains are key to a firm’s ability to successfully compete domestically and internationally against the world’s leading firms. Efficiency gains means that a firm can produce more output than before without the use of additional resource inputs. An increase in output means firms can make a positive impact on GDP.
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There are two categories of efficiencies: Internal to the individual firm . Productive efficiency – an individual firm is able to produce a quality product at the least cost possible, using the latest state-of-the-art technology. Allocative efficiency – an individual firm is able to produce a quality product at the desired output level without wasting or under-utilizing any resources in the process. It can produce a given product using the fewest resources possible. External
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Impact%20of%20Governance%20on%20the%20Efficiency%20of%20Firms

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