GEP Research Paper 03/50
Trade, Technology Transfer and National Efficiency in Developing Countries
Michael Henry, Richard Kneller and Chris Milner
Abstract
This paper simultaneously explores the determinants of the developing countries' production frontier and their ‘efficiency' in using the available resources and technology. In doing so it allows for the transfer of (industrial country) technology in determining the frontier and for international trade to influence absorptive capacity and national efficiency levels. Stochastic frontier analysis is used to model the production frontier for 57 developing countries for the period 1970-1998, to measure cross-country and temporal differences in efficiency levels and to explain the differences in efficiency levels. The results indicate significant convergence of efficiency levels and an important influence of trade and trade policy in raising efficiency levels.
Issued in December 2003.
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