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Measuring the economic efficiency performance in Latin American and Caribbean countries: An empirical evidence from stochastic production frontier and data envelopment analysis

Author

Listed:
  • Matheus Koengkan
  • José Alberto Fuinhas
  • Emad Kazemzadeh
  • Fariba Osmani
  • Nooshin Karimi Alavijeh

Abstract

The development of the global economy has raised concerns about economic efficiency and productivity. In this context, understanding the concepts of economic efficiency and productivity and the knowledge of the techniques available for their measurement are also of fundamental importance. Thus, the objective of the present study is to measure the economic efficiency performance of 14 countries from the Latin America and the Caribbean (LAC) region in the period from 1990 to 2017. Analysing the economic performance of these countries with linear Cobb-Douglas production function, two methods were used: the parametric stochastic frontier analysis (SFA) and non-parametric data envelopment analysis (DEA). Both approaches (SFA and DEA) show that Panama is the most economically efficient country in the LAC region, followed by Chile. Concerning other countries, the choice between the SFA and DEA models affects the ratings. Results indicate that Brazil (SFA) and Nicaragua (DAE) are the least economically efficient LAC countries.

Suggested Citation

  • Matheus Koengkan & José Alberto Fuinhas & Emad Kazemzadeh & Fariba Osmani & Nooshin Karimi Alavijeh, 2022. "Measuring the economic efficiency performance in Latin American and Caribbean countries: An empirical evidence from stochastic production frontier and data envelopment analysis," International Economics, CEPII research center, issue 169, pages 43-54.
    • Handle: RePEc:cii:cepiie:2022-q2-169-4
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    Cited by:

    1. Hussein Al-Zyoud & Asheref Illiyan & Vasim Akram, 2022. "Impact of Economic Openness on Macro Technical Efficiency in South Asia," International Advances in Economic Research, Springer;International Atlantic Economic Society, vol. 28(3), pages 91-103, November.
    2. Alireza Amirteimoori & Biresh K. Sahoo & Saber Mehdizadeh, 2023. "Data envelopment analysis for scale elasticity measurement in the stochastic case: with an application to Indian banking," Financial Innovation, Springer;Southwestern University of Finance and Economics, vol. 9(1), pages 1-36, December.
    3. Yaovarate Chaovanapoonphol & Jittima Singvejsakul & Songsak Sriboonchitta, 2022. "Technical Efficiency of Rice Production in the Upper North of Thailand: Clustering Copula-Based Stochastic Frontier Analysis," Agriculture, MDPI, vol. 12(10), pages 1-13, October.
    4. Chen, Xiang & Tzeng, Shian-Jang & Wang, Dan, 2025. "Green Productivity growth in Chinese Agriculture Industry–A novel approach and its empirical verification," Economic Analysis and Policy, Elsevier, vol. 86(C), pages 2001-2018.
    5. Néstor Le Clech & Juan Carlos Guevara-Pérez, 2023. "Latin America and the Caribbean’s Productivity: The Role of Pro-Market Policies, Institutions, Infrastructure, and Natural Resource Endowments," Economies, MDPI, vol. 11(5), pages 1-21, May.
    6. Chuan Li & Liangrong Song, 2022. "Regional Differences and Spatial Convergence of Green Development in China," Sustainability, MDPI, vol. 14(14), pages 1-16, July.
    7. Ma, Guangcheng & Cao, Jianhua & Famanta, Mahamane, 2023. "Does the coordinated development of two-way FDI increase the green energy efficiency of Chinese cities? Evidence from Chinese listed companies," Structural Change and Economic Dynamics, Elsevier, vol. 65(C), pages 59-77.
    8. Pei Fun Lee & Weng Siew Lam & Weng Hoe Lam, 2023. "Performance Evaluation of the Efficiency of Logistics Companies with Data Envelopment Analysis Model," Mathematics, MDPI, vol. 11(3), pages 1-15, January.
    9. Bo Yang & Yaping Yang & Yangxiaoyue Liu & Xiafang Yue, 2022. "Spatial Structure Evolution and Economic Benefits of Rapidly Expanding the High-Speed Rail Network in Developing Regions: A Case Study in Western China," Sustainability, MDPI, vol. 14(23), pages 1-20, November.
    10. Ireneusz Miciula & Anna Bielawa & Dominika Krol-Smetak & Henryk Wojtaszek & Apoloniusz Kurylczyk & Michal Romanczuk & Malgorzata Chojnacka, 2024. "Economic Efficiency as a Factor of Enterprise Development," European Research Studies Journal, European Research Studies Journal, vol. 0(2), pages 478-487.
    11. Rita, Rui & Marques, Vitor & Bárbara, Diogo & Chaves, Inês & Macedo, Pedro & Moutinho, Victor & Pereira, Mariana, 2023. "Crossing non-parametric and parametric techniques for measuring the efficiency: Evidence from 65 European electricity Distribution System Operators," Energy, Elsevier, vol. 283(C).

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    JEL classification:

    • C50 - Mathematical and Quantitative Methods - - Econometric Modeling - - - General
    • E60 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - General
    • E00 - Macroeconomics and Monetary Economics - - General - - - General

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