Centralized allocations in free disposal hull technologies

For a class of nonconvex production technologies, we solve the analytical problem represented by the evaluation of the efficiency of an industry when outputs/inputs can be reallocated over both given and variable number of firms. Besides establishing relationships between the aggregate technology, the free replicability and the elementary replicability models, the paper introduces a general decomposition of industry efficiency measures holding also for shadow prices. Empirical illustration of the theoretical results and of the effectiveness of the proposed approach is given with reference to various sets of DMUs employing different multiple inputs and outputs technologies.