Separating Catch-up and Technical Change in Stochastic Frontier Models. A Monte Carlo Approach

In the empirical analysis of economic growth an interesting topic is whether backward countries move towards the technological frontier (what it is known as technological catch-up). A common approach to testing for the existence of catching-up is the estimation of stochastic frontiers. However, it is not clear under which conditions technological catch-up can be disentangled from technical change in stochastic frontier models. We try to fill this gap in the literature using Monte Carlo techniques. Keywords: Monte Carlo analysis, stochastic frontier models, technological catch-up, technical change

[1]  C. Lovell,et al.  Stochastic Frontier Analysis: Frontmatter , 2000 .

[2]  D. Aigner,et al.  P. Schmidt, 1977,?Formulation and estimation of stochastic frontier production function models,? , 1977 .

[3]  G. Battese,et al.  Frontier production functions, technical efficiency and panel data: With application to paddy farmers in India , 1992 .

[4]  A. U.S.,et al.  FORMULATION AND ESTIMATION OF STOCHASTIC FRONTIER PRODUCTION FUNCTION MODELS , 2001 .

[5]  William H. Greene,et al.  Reconsidering heterogeneity in panel data estimators of the stochastic frontier model , 2005 .

[6]  G. Battese,et al.  A model for technical inefficiency effects in a stochastic frontier production function for panel data , 1995 .

[7]  Gary Koop,et al.  The components of output growth: A stochastic frontier analysis , 1999 .

[8]  R. Kneller,et al.  The specification of the aggregate production function in the presence of inefficiency , 2003 .

[9]  R. Russell,et al.  Human Capital and Convergence: A Production-Frontier Approach , 2005 .

[10]  Richard Knellerand,et al.  Frontier Technology and Absorptive Capacity: Evidence from OECD Manufacturing Industries* , 2006 .

[11]  Rolf Färe,et al.  Productivity growth, technical progress, and efficiency , 1997 .

[12]  R. Nelson,et al.  Investment in humans, technological diffusion and economic growth , 1965 .

[13]  Valentin Zelenyuk,et al.  Testing for (Efficiency) Catching-up , 2007 .

[14]  R. R. Russell,et al.  Technological Change, Technological Catch-up, and Capital Deepening: Relative Contributions to Growth and Convergence , 2002 .

[15]  Subal C. Kumbhakar,et al.  Estimation and decomposition of productivity change when production is not efficient: a paneldata approach , 2000 .

[16]  Danny Quah,et al.  Empirics for Growth and Distribution: Stratification, Polarization, and Convergence Clubs , 1997 .

[17]  Magnus Henrekson,et al.  A new framework for testing the effect of government spending on growth and productivity , 1994 .

[18]  S. Kumbhakar,et al.  Estimation of growth convergence using a stochastic production frontier approach , 2005 .

[19]  Osman Zaim,et al.  Catching-up and innovation in high- and low-income countries , 1997 .