Economic Performance and Institutions: Measuring Technical Efficiency Using SPF Approach

Alali, Walid Y. (2009): Economic Performance and Institutions: Measuring Technical Efficiency Using SPF Approach.

Abstract

This paper propose to employ the SPF approach (stochastic production frontier) to measure the technical efficiency of the country level for best economic performance, as the measure of growth is the essential practice to comprehend the roots of economic growth. It is evident from the results, that there is an essential difference in the perception of the technical efficiency cross-country and the total factor productivity traditional growth measurement. The SPF Model as well allows us to search for technical efficiency sources. The sources of Technical inefficiency cross-country are demonstrated by institutional arrangements. We find amongst all the different measures of institutions the role of openness to international trade, the State and political institutions are important factors of the global economic performance divergence.

• Item Type: MPRA Paper
• Language: English
• Keywords: Productivity; Technical Efficiency; Institutions; Stochastic Production Frontier; Economic Performance
• Subjects: E - Macroeconomics and Monetary Economics > E0 - General > E02 - Institutions and the Macroeconomy; G - Financial Economics > G1 - General Financial Markets > G14 - Information and Market Efficiency ; Event Studies ; Insider Trading; O - Economic Development, Innovation, Technological Change, and Growth > O4 - Economic Growth and Aggregate Productivity; O - Economic Development, Innovation, Technological Change, and Growth > O4 - Economic Growth and Aggregate Productivity > O43 - Institutions and Growth

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