IDEAS home Printed from
   My bibliography  Save this article

Industrial upgrading efficiency and free markets in emerging economies: A two‐stage meta‐frontier approach


  • Shi‐Xiao Wang
  • Wen‐Min Lu
  • Shiu‐Wan Hung


This paper establishes an industrial upgrading model by dividing the industrial upgrading process into two: the foundation–construction and industrial upgrading stages. Eighty‐one sample countries, from 2006 to 2012, were divided into two groups according to their degree of market freedom. The meta‐frontier method was employed to explore technology gaps in the groups caused by the different markets. It was found that emerging economies with a free market have a better upgrading performance than those with a restricted market, and the efficiency gap between the two groups was seen to be continually increasing.

Suggested Citation

  • Shi‐Xiao Wang & Wen‐Min Lu & Shiu‐Wan Hung, 2020. "Industrial upgrading efficiency and free markets in emerging economies: A two‐stage meta‐frontier approach," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 41(6), pages 1084-1095, September.
  • Handle: RePEc:wly:mgtdec:v:41:y:2020:i:6:p:1084-1095
    DOI: 10.1002/mde.3172

    Download full text from publisher

    File URL:
    Download Restriction: no

    File URL:
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item

    References listed on IDEAS

    1. Montresor, Sandro & Vezzani, Antonio, 2015. "The production function of top R&D investors: Accounting for size and sector heterogeneity with quantile estimations," Research Policy, Elsevier, vol. 44(2), pages 381-393.
    2. Maurice Schiff & Yanling Wang, 2008. "North-South and South-South Trade-Related Technology Diffusion: How Important Are They in Improving TFP Growth?," Journal of Development Studies, Taylor & Francis Journals, vol. 44(1), pages 49-59.
    3. Jun Zhang & Wan-wen Chu & Keun Lee, 2015. "Special issue on economic development and industrial upgrading: East Asia and China," Journal of the Asia Pacific Economy, Taylor & Francis Journals, vol. 20(3), pages 343-344, July.
    4. Soyoung Kim & Jong‐Wha Lee & Cyn‐Young Park, 2011. "Emerging Asia: Decoupling or Recoupling," The World Economy, Wiley Blackwell, vol. 34(1), pages 23-53, January.
    5. Rajah Rasiah & Vicki Crinis & Hwok-Aun Lee, 2015. "Industrialization and labour in Malaysia," Journal of the Asia Pacific Economy, Taylor & Francis Journals, vol. 20(1), pages 77-99, January.
    6. George E. Halkos & Nickolaos G. Tzeremes, 2013. "A Two‐Stage Double Bootstrap DEA: The Case of the Top 25 European Football Clubs' Efficiency Levels," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 34(2), pages 108-115, March.
    7. Guan, Jiancheng & Chen, Kaihua, 2012. "Modeling the relative efficiency of national innovation systems," Research Policy, Elsevier, vol. 41(1), pages 102-115.
    8. Cristian Barra & Roberto Zotti, 2016. "Managerial Efficiency in Higher Education Using Individual Versus Aggregate Level Data. Does the choice of Decision Making Units Count?," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 37(2), pages 106-126, March.
    9. Weixin Yang & Lingguang Li, 2017. "Analysis of Total Factor Efficiency of Water Resource and Energy in China: A Study Based on DEA-SBM Model," Sustainability, MDPI, vol. 9(8), pages 1-21, July.
    10. Mark Kaiser & Brian Snyder, 2013. "Capital Investment and Operational Decision Making in the Offshore Drilling Industry," The Engineering Economist, Taylor & Francis Journals, vol. 58(1), pages 35-58.
    11. Abiad, Abdul & Bluedorn, John & Guajardo, Jaime & Topalova, Petia, 2015. "The Rising Resilience of Emerging Market and Developing Economies," World Development, Elsevier, vol. 72(C), pages 1-26.
    12. Giuliani, Elisa & Pietrobelli, Carlo & Rabellotti, Roberta, 2005. "Upgrading in Global Value Chains: Lessons from Latin American Clusters," World Development, Elsevier, vol. 33(4), pages 549-573, April.
    13. Iammarino, Simona & McCann, Philip, 2006. "The structure and evolution of industrial clusters: Transactions, technology and knowledge spillovers," Research Policy, Elsevier, vol. 35(7), pages 1018-1036, September.
    14. Daniel McFadden, 2006. "Free Markets and Fettered Consumers," American Economic Review, American Economic Association, vol. 96(1), pages 5-29, March.
    15. Brandt, Loren & Thun, Eric, 2010. "The Fight for the Middle: Upgrading, Competition, and Industrial Development in China," World Development, Elsevier, vol. 38(11), pages 1555-1574, November.
    16. Chunpeng Fan & Donghui Zhang & Cun-Hui Zhang, 2011. "On Sample Size of the Kruskal–Wallis Test with Application to a Mouse Peritoneal Cavity Study," Biometrics, The International Biometric Society, vol. 67(1), pages 213-224, March.
    17. Chyan Yang & James Tsung-Cheng Wang & Wen-Min Lu, 2007. "Performance Measurement In Military Provisions: The Case Of Retail Stores Of Taiwan'S General Welfare Service Ministry," Asia-Pacific Journal of Operational Research (APJOR), World Scientific Publishing Co. Pte. Ltd., vol. 24(03), pages 313-332.
    18. Kozo Kiyota, 2014. "Industrial Upgrading in a Multiple‐cone Heckscher–Ohlin Model: The Flying Geese Patterns of Industrial Development," Review of Development Economics, Wiley Blackwell, vol. 18(1), pages 177-193, February.
    19. Pankaj Sharma & Srinivasa B. S. Nookala & Anubhav Sharma, 2012. "India's National and Regional Innovation Systems: Challenges, Opportunities and Recommendations for Policy Makers," Industry and Innovation, Taylor & Francis Journals, vol. 19(6), pages 517-537, August.
    20. Qun Bao & Ninghua Ye & Ligang Song, 2016. "Congested Export Spillover in China," Review of Development Economics, Wiley Blackwell, vol. 20(1), pages 272-282, February.
    21. Hung, Shiu-Wan & Wang, An-Pang, 2012. "Entrepreneurs with glamour? DEA performance characterization of high-tech and older-established industries," Economic Modelling, Elsevier, vol. 29(4), pages 1146-1153.
    22. Cammett, Melani, 2007. "Business-Government Relations and Industrial Change: The Politics of Upgrading in Morocco and Tunisia," World Development, Elsevier, vol. 35(11), pages 1889-1903, November.
    23. Grossman, Gene M. & Helpman, Elhanan, 1991. "Trade, knowledge spillovers, and growth," European Economic Review, Elsevier, vol. 35(2-3), pages 517-526, April.
    24. Toole, Andrew A., 2012. "The impact of public basic research on industrial innovation: Evidence from the pharmaceutical industry," Research Policy, Elsevier, vol. 41(1), pages 1-12.
    25. Charnes, A. & Cooper, W. W. & Golany, B. & Seiford, L. & Stutz, J., 1985. "Foundations of data envelopment analysis for Pareto-Koopmans efficient empirical production functions," Journal of Econometrics, Elsevier, vol. 30(1-2), pages 91-107.
    26. R. D. Banker & A. Charnes & W. W. Cooper, 1984. "Some Models for Estimating Technical and Scale Inefficiencies in Data Envelopment Analysis," Management Science, INFORMS, vol. 30(9), pages 1078-1092, September.
    27. Tone, Kaoru, 2001. "A slacks-based measure of efficiency in data envelopment analysis," European Journal of Operational Research, Elsevier, vol. 130(3), pages 498-509, May.
    28. Lissoni, Francesco, 2001. "Knowledge codification and the geography of innovation: the case of Brescia mechanical cluster," Research Policy, Elsevier, vol. 30(9), pages 1479-1500, December.
    Full references (including those not matched with items on IDEAS)


    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.

    Cited by:

    1. Salma Benchekroun & V. G. Venkatesh & Ilham Dkhissi & D. Jinil Persis & Arunmozhi Manimuthu & M. Suresh & V. Raja Sreedharan, 2023. "Managing the retail operations in the COVID‐19 pandemic: Evidence from Morocco," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 44(1), pages 424-447, January.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Shi‐Xiao Wang & Wen‐Min Lu & Shiu‐Wan Hung, 2020. "Improving innovation efficiency of emerging economies: The role of manufacturing," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 41(4), pages 503-519, June.
    2. Ioannis E. Tsolas, 2020. "Financial Performance Assessment of Construction Firms by Means of RAM-Based Composite Indicators," Mathematics, MDPI, vol. 8(8), pages 1-16, August.
    3. Wen‐Min Lu & Qian Long Kweh & Mohammad Nourani & Jui‐Min Shih, 2020. "Major weapons procurement: An efficiency‐based approach for the selection of fighter jets," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 41(4), pages 574-585, June.
    4. Yongqi Feng & Haolin Zhang & Yung-ho Chiu & Tzu-Han Chang, 2021. "Innovation efficiency and the impact of the institutional quality: a cross-country analysis using the two-stage meta-frontier dynamic network DEA model," Scientometrics, Springer;Akadémiai Kiadó, vol. 126(4), pages 3091-3129, April.
    5. Tianqun Xu & Ping Gao & Qian Yu & Debin Fang, 2017. "An Improved Eco-Efficiency Analysis Framework Based on Slacks-Based Measure Method," Sustainability, MDPI, vol. 9(6), pages 1-21, June.
    6. Imanirad, Raha & Cook, Wade D. & Aviles-Sacoto, Sonia Valeria & Zhu, Joe, 2015. "Partial input to output impacts in DEA: The case of DMU-specific impacts," European Journal of Operational Research, Elsevier, vol. 244(3), pages 837-844.
    7. Amineh Ghazi & Farhad Hosseinzadeh Lotfi & Masoud Sanei, 2020. "Hybrid efficiency measurement and target setting based on identifying defining hyperplanes of the PPS with negative data," Operational Research, Springer, vol. 20(2), pages 1055-1092, June.
    8. Maria Silva Portela & Pedro Borges & Emmanuel Thanassoulis, 2003. "Finding Closest Targets in Non-Oriented DEA Models: The Case of Convex and Non-Convex Technologies," Journal of Productivity Analysis, Springer, vol. 19(2), pages 251-269, April.
    9. Yung-ho Chiu & Chin-wei Huang & Chung-te Ting, 2012. "A non-radial measure of different systems for Taiwanese tourist hotels’ efficiency assessment," Central European Journal of Operations Research, Springer;Slovak Society for Operations Research;Hungarian Operational Research Society;Czech Society for Operations Research;Österr. Gesellschaft für Operations Research (ÖGOR);Slovenian Society Informatika - Section for Operational Research;Croatian Operational Research Society, vol. 20(1), pages 45-63, March.
    10. Tran, Trung Hieu & Mao, Yong & Nathanail, Paul & Siebers, Peer-Olaf & Robinson, Darren, 2019. "Integrating slacks-based measure of efficiency and super-efficiency in data envelopment analysis," Omega, Elsevier, vol. 85(C), pages 156-165.
    11. W. Liu & W. Meng & X. Li & D. Zhang, 2010. "DEA models with undesirable inputs and outputs," Annals of Operations Research, Springer, vol. 173(1), pages 177-194, January.
    12. Ibrahim Alnafrah, 2021. "Efficiency evaluation of BRICS’s national innovation systems based on bias-corrected network data envelopment analysis," Journal of Innovation and Entrepreneurship, Springer, vol. 10(1), pages 1-28, December.
    13. Kao, Chiang, 2022. "Closest targets in the slacks-based measure of efficiency for production units with multi-period data," European Journal of Operational Research, Elsevier, vol. 297(3), pages 1042-1054.
    14. Asmild, Mette & Pastor, Jesús T., 2010. "Slack free MEA and RDM with comprehensive efficiency measures," Omega, Elsevier, vol. 38(6), pages 475-483, December.
    15. Dariush Khezrimotlagh & Wade D. Cook & Joe Zhu, 2021. "Number of performance measures versus number of decision making units in DEA," Annals of Operations Research, Springer, vol. 303(1), pages 529-562, August.
    16. Gerami, Javad & Mozaffari, Mohammad Reza & Wanke, Peter F. & Correa, Henrique L., 2022. "Improving information reliability of non-radial value efficiency analysis: An additive slacks based measure approach," European Journal of Operational Research, Elsevier, vol. 298(3), pages 967-978.
    17. Fukuyama, Hirofumi & Weber, William L., 2009. "A directional slacks-based measure of technical inefficiency," Socio-Economic Planning Sciences, Elsevier, vol. 43(4), pages 274-287, December.
    18. Zhu, Qingyuan & Wu, Jie & Ji, Xiang & Li, Feng, 2018. "A simple MILP to determine closest targets in non-oriented DEA model satisfying strong monotonicity," Omega, Elsevier, vol. 79(C), pages 1-8.
    19. Irena Lacka & Lukasz Brzezicki, 2021. "The Efficiency and Productivity Evaluation of National Innovation Systems in Europe," European Research Studies Journal, European Research Studies Journal, vol. 0(Special 3), pages 471-496.
    20. Ray, Subhash C. & Ghose, Arpita, 2014. "Production efficiency in Indian agriculture: An assessment of the post green revolution years," Omega, Elsevier, vol. 44(C), pages 58-69.

    More about this item


    Access and download statistics


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wly:mgtdec:v:41:y:2020:i:6:p:1084-1095. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: . General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.