This literature implies persistent, know but unexploded opportunities for pure profit from managerial takeovers.
There is a great battle in the 1970s between George Stigler and the developer of the X-inefficiency concept over whether these opportunities were real or not.
The concept was developed for this time and motion studies of factories in the Third World where there were vast differences between the productivity of competing firms in the same industry. Some had first world productivity, others had Third World productivity
A good argument against x-inefficiency is De Alessi, L. “Property Rights, Transaction Costs, and X-Efficiency: An Essay in Economic Theory”. American Economic Review (March 1983).
The puzzlingly large productivity differences across firms even in narrowly defined industries producing standard products lead to doubts about the efficiency of some firms, often the smaller firms in an industry. Some firms produce half as much output from the same measured inputs as rivals and still survive in competition (Syverson 2011).
This diversity reflects inter-firm differences in managerial ability, organisational practices, choice of technology, the age of the business and its capital, location, workforce skills, intangible assets and changes in demand and productivity that are idiosyncratic to each individual firm (Stigler 1958, 1976, 1987; De Alessi 1983).
Small and large firms can survive in direct competition because of different trade-offs they make between hierarchy, location, product ranges, production flexibility and pace of growth (Audretsch, Prince and Thurik 1998; Audretsch and Mahmood 1994; Stigler 1939, 1983, 1987; Jovanovic 1982; Chappell, Mayer and Shughart 1993; Das, Chappell and Shughart 1993).
The speech by Bank of England chief economist Andy Haldane last month was another valiant attempt to get to the bottom of the productivity puzzle. Why did productivity decline after the recession and why has that decline been particularly sharp in the UK?
While it might, he says, be convenient to blame a financial services sector for over inflating UK productivity before the recession and knocking the stuffing out of it afterwards, this is only part of the story:
It is sometimes asserted that, without the collapse in financial services output associated with the financial crisis, the UK’s productivity performance would have held up. It is certainly true that financial sector productivity was probably over-stated in the run-up to the crisis.44 Nonetheless, the subsequent sharp fall in financial services productivity is plainly not the whole story. Of the 1.7 percentage point fall in the UK’s productivity growth since 2008, less than a third can…
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Utopia, you are standing in it! 
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