Do Technology and Efficiency Differences Determine Productivity?

Tjalling C. Koopmans Discussion Paper

28 Pages Posted: 4 Jul 2007

See all articles by Jaap W.B. Bos

Jaap W.B. Bos

Maastricht University

Michael Koetter

Halle Institute for Economic Research

Claire Economidou

Utrecht University - School of Economics

James W. Kolari

Texas A&M University - Department of Finance

Date Written: July 14, 2007

Abstract

This paper investigates the forces driving output growth, namely technological, efficiency, and input changes, in 80 countries over the period 1970-2000. Relevant past studies typically assume that: (i) countries use resources efficiently, and (ii) the underlying production technology is the same for all countries. We address these issues by estimating a stochastic frontier model, which explicitly accounts for inefficiency, augmented with a latent class structure, which allows for production technologies to differ across groups of countries. Membership of these groups is estimated, rather than determined ex ante. Our results indicate the existence of three groups of countries. These groups differ significantly in terms of efficiency levels, technological change, and the development of capital and labor elasticities. However, a consistent finding across groups is that growth is driven mainly by factor accumulation (capital deepening).

Keywords: total factor productivity, latent class, stochastic frontier, efficiency, growth

JEL Classification: O47, O30, D24, G21, C24

Suggested Citation

Bos, Jaap W.B. and Koetter, Michael and Economidou, Claire and Kolari, James W., Do Technology and Efficiency Differences Determine Productivity? (July 14, 2007). Tjalling C. Koopmans Discussion Paper. Available at SSRN: https://ssrn.com/abstract=998107 or http://dx.doi.org/10.2139/ssrn.998107

Jaap W.B. Bos

Maastricht University ( email )

P.O. Box 616
Maastricht, 6200MD
Netherlands

Michael Koetter (Contact Author)

Halle Institute for Economic Research ( email )

P.O. Box 11 03 61
Kleine Maerkerstrasse 8
D-06017 Halle, 06108
Germany

HOME PAGE: http://www.iwh-halle.de/en/about-the-iwh/people/detail/michael-koetter/

Claire Economidou

Utrecht University - School of Economics ( email )

Kriekenpitplein 21-22
Adam Smith Building
Utrecht, 3584 EC
Netherlands

James W. Kolari

Texas A&M University - Department of Finance ( email )

MS-4218
Department of Finance
College Station, TX TX 77843-4218
United States
979-845-4803 (Phone)
979-845-3884 (Fax)

Register to save articles to
your library

Register

Paper statistics

Downloads
125
Abstract Views
1,028
rank
225,923
PlumX Metrics