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Telecommunications Capital Intensity and Aggregate Production Efficiency: a Meta-Frontier Analysis

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  • Repkine, Alexandre

Abstract

This study explores the link between telecommunications capital intensity and the aggregate production efficiency in the framework of meta-frontier analysis. The latter makes it possible to compare technical efficiency levels between countries operating under different technological frontiers. Our analysis suggests that increases in per capita levels of telecommunication capital will be most helpful in increasing the efficiency with which the existing technological knowledge and production resources are used, but not the technological frontier itself. We thus identify countries where additional investments in telecommunications are desirable as the ones where the technological lag is relatively small and efficient usage of productive resources is a problem. Africa appears to be the region where policies providing incentives for firms and households to purchase more telecommunications equipment will produce the most sizeable effect. In contrast, in the OECD countries where production practices are already the most efficient ones globally and the existing per capita telecommunications capital stock is high, further increases in the latter are not likely to result in any sizable production efficiency gains.

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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 13059.

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Date of creation: 04 Jan 2009
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Handle: RePEc:pra:mprapa:13059

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Keywords: telecommunications; meta-frontier analysis; economic growth; production efficiency;

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  1. Marcello M. Estevão, 2004. "Why is Productivity Growth in the Euro Area so Sluggish?," IMF Working Papers 04/200, International Monetary Fund.
  2. Paul Schreyer, 2000. "The Contribution of Information and Communication Technology to Output Growth: A Study of the G7 Countries," OECD Science, Technology and Industry Working Papers 2000/2, OECD Publishing.
  3. Aigner, Dennis & Lovell, C. A. Knox & Schmidt, Peter, 1977. "Formulation and estimation of stochastic frontier production function models," Journal of Econometrics, Elsevier, Elsevier, vol. 6(1), pages 21-37, July.
  4. George Battese & D. Rao & Christopher O'Donnell, 2004. "A Metafrontier Production Function for Estimation of Technical Efficiencies and Technology Gaps for Firms Operating Under Different Technologies," Journal of Productivity Analysis, Springer, Springer, vol. 21(1), pages 91-103, January.
  5. Battese, George E. & Coelli, Tim J., 1988. "Prediction of firm-level technical efficiencies with a generalized frontier production function and panel data," Journal of Econometrics, Elsevier, Elsevier, vol. 38(3), pages 387-399, July.
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