Testing for (Efficiency) Catching-Up

Abstract

We used advances in data envelopment analysis (DEA) techniques to examine efficiency scores and investigate the issue of convergence and divergence in a cross-country analysis. Specifically, we used bootstrapping techniques to examine a data set of 52 developed and developing countries. We found that when using the standard DEA model, some of the results were not robust. Further, we broke the sample into groups to examine club convergence. We found that efficiency scores were significantly different between groups and that there was same evidence of convergence of efficiency scores within each group.

Keywords: Convergence, Efficiency, Catching-up, Nonparametric

JEL Classification: C14, C15, C44, O1