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Openness, Efficiency and Technology: An Industry Assessment

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  • Dimitris Christopoulos
  • Peter McAdam

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.
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  • Dimitris Christopoulos & Peter McAdam, 2013. "Openness, Efficiency and Technology: An Industry Assessment," Scottish Journal of Political Economy, Scottish Economic Society, vol. 60(1), pages 56-70, February.
    • Handle: RePEc:bla:scotjp:v:60:y:2013:i:1:p:56-70
    DOI: sjpe.12002
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    1. Bournakis, Ioannis & Christopoulos, Dimitris & Mallick, Sushanta, 2015. "Knowledge Spillovers, Absorptive Capacity and Growth: An Industry-level Analysis for OECD Countries," MPRA Paper 63542, University Library of Munich, Germany.
    2. Ioannis Bournakis & Dimitris Christopoulos & Sushanta Mallick, 2018. "Knowledge Spillovers And Output Per Worker: An Industry‐Level Analysis For Oecd Countries," Economic Inquiry, Western Economic Association International, vol. 56(2), pages 1028-1046, April.
    3. Bournakis, Ioannis & Rizov, Marian & Christopoulos, Dimitris, 2023. "Revisiting the effect of institutions on the economic performance of SSA countries: Do legal origins matter in the context of ethnic heterogeneity?," Economic Modelling, Elsevier, vol. 125(C).
    4. Yohanes Andika Tjitrajaya & Charvin Lim & Shafiah Meike Serepina Pasaribu & Ferensky Regina Sandjaja & Ivantia Savitri Mokoginta, 2021. "The importance of economic openness on technical efficiency in global perspective," International Journal of Economic Policy Studies, Springer, vol. 15(2), pages 387-403, September.
    5. Md Shahiduzzaman & Allan Layton & Khorshed Alam, 2015. "On the contribution of information and communication technology to productivity growth in Australia," Economic Change and Restructuring, Springer, vol. 48(3), pages 281-304, November.

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