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Relative Winners and Losers from Efficiency Spillovers in Africa with Policy Implications for Regional Integration

Anthony J. Glass, Karligash Kenjegalieva, Victor Ajayi, Morakinyo Adetutu and Robin C. Sickles

NBS Discussion Papers in Economics from Economics, Nottingham Business School, Nottingham Trent University

Abstract: Studies that have analyzed the efficiency of developing countries have estimated non-spatial frontier models. We extend this approach by accounting for spatial dependence among African countries. In particular, we estimate a spatial Durbin stochastic production frontier model. We also make novel use of the efficiency scores from our spatial model to suggest a direction for regional integration policy for Africa that policy makers can consider. A previous suggestion to promote regional integration in Southern Africa has been to use South Africa as a regional integration hub and to encourage other countries in the region to improve economic links with the hub. We continue with this line of enquiry and although we conclude that there are currently no African countries that are ideal candidates to be a regional integration hub, we suggest three other countries that policy makers may consider using as hubs in the future. We therefore suggest that it would be prudent to consider implementing policies to expedite the readiness of these countries to act as integration hubs.

Keywords: Stochastic frontier analysis; Spatial autoregression; Panel data; Asymmetric efficiency spillovers; Africa; Regional integration (search for similar items in EconPapers)
JEL-codes: C23 O19 O47 O55 (search for similar items in EconPapers)
Date: 2017-01
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