Trade, technology transfer and national efficiency in developing countries

Michael Henry, Richard Kneller, Chris Milner*

*Corresponding author for this work

Research output: Contribution to journalArticle

Abstract

This paper simultaneously explores the determinants of the developing countries' production frontier and these countries' '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's influence on 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 differences in efficiency levels across countries and regions and movement over time, and an important influence of trade and trade policy in raising output both through technology improvements embodied in imported capital goods and by inducing efficiency improvements.

Original languageEnglish
Pages (from-to)237-254
Number of pages18
JournalEuropean Economic Review
Volume53
Issue number2
Early online date29 May 2008
DOIs
Publication statusPublished - Feb 2009

Keywords

  • Aggregate efficiency
  • Technology transfer
  • Trade

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