Absorptive Capacity and Efficiency: A Comparative Stochastic Frontier Approach Using Sectoral Data

Letizia Montinari and Michael Rochlitz ()

No 4/2012, Working Papers from IMT School for Advanced Studies Lucca

Abstract: In this paper, we investigate differences in and determinants of technical efficiency across three groups of OECD, Asian and Latin American countries. As technical efficiency determines the capacity with which countries absorb technology produced abroad, these differences are important to understand differences in growth and productivity across countries, especially for developing countries which depend to a large extend on foreign technology. Using a stochastic frontier framework and data for 22 manufacturing sectors for 1996-2005, we find notable differences in technical efficiency between the three country groups we examine. We then investigate the effect of human capital and domestic R&D, proxied by the stock of patents, on technical efficiency. We find that while human capital has always a strongly positive effect on efficiency, an increase in the stock of patents has positive effects on efficiency in high-tech sectors, but negative effects in low-tech sectors.

Keywords: absorptive capacity; efficiency; stochastic frontier analysis (search for similar items in EconPapers)
JEL-codes: C33 O14 O33 (search for similar items in EconPapers)
Pages: 27 pages
Date: 2012-06, Revised 2012-06
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Published in EIC working paper series

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