Openness, Efficiency and Technology: An Industry Assessment

Dimitris Christopoulos and Peter McAdam (pmcadamp@googlemail.com)

No 812, School of Economics Discussion Papers from School of Economics, University of Surrey

Abstract: Most growth models imply positive impacts on economic growth from greater openness. And a key factor linking openness and growth is the efficiency with which resources are used. Empirically, however, the efficiency impacts of trade have been ambiguous. Using a stochastic frontier analysis, we examine the impact of openness on technical (in)efficiency for a sample of OECD economies. Unlike the bulk of related studies, we work at the industry level. Given recent debates on technology-inspired growth and TFP effects, we additionally examine whether ICT expenditures impacts openness and efficiency. We establish the elasticity of openness with respect to (in)efficiency; TFP and Scale Economies; and Technical Inefficiency across countries and sectors. Both openness and ICT usage have robustly positive impacts on efficiency. Our results shed light on the impact of, spillovers be- tween, and heterogeneity across countries and industries from, increasing openness interacted with the use of advanced technologies.

Pages: 20 pages
Date: 2012-07
New Economics Papers: this item is included in nep-cse, nep-eff, nep-fdg and nep-pbe
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Journal Article: Openness, Efficiency and Technology: An Industry Assessment (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:sur:surrec:0812

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