Does Collaboration Improve Organizational Efficiency? A Stochastic Frontier Approach Examining Cities’ Use of EECBG Funds

Abstract

Despite an abundance of research on collaboration, relatively little attention has been paid to the impact of collaboration on organizational outputs. This study helps fill this gap by unveiling the efficiency implications of collaborative arrangements. Using stochastic frontier (SF) analysis, we evaluate the efficiency of U.S. cities’ use of Energy Efficiency Conservation Block Grant (EECBG) funds in implementing sustainability programs and the extent to which collaboration influences resulting efficiency levels. The findings indicate the presence of considerable inefficiency in cities’ use of EECBG dollars. However, cities’ collaboration with a greater variety of governmental and community organizations is found to reduce this inefficiency, supporting the positive effects of collaborative partnerships in public policy implementation and management. Collaboration’s efficiency-improving effects are, however, not linear; its marginal effects diminish as cities approach the highest levels of collaboration. This implies that while collaboration brings a positive impact on achieving cost-efficient organizational outcomes, there is an optimal level of collaboration for cities to engage in.