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Transport infrastructure and technical efficiency in a panel of countries: Accounting for endogeneity in a stochastic frontier model

Author

Listed:
  • Ligia Alba Melo-Becerra
  • María Teresa Ramírez-Giraldo

Abstract

En este artículo se estima una frontera de producción global utilizando modelos de frontera estocástica para evaluar la contribución de la infraestructura de transporte en el desempeño de los países. Encontramos que el papel de la infraestructura se subestima bajo el supuesto de exogeneidad, lo que indica que tener en cuenta la endogeneidad es crucial en la estimación. Los resultados sugieren que una mejor dotación de infraestructura contribuye al crecimiento económico, destacando su importancia para explicar las diferencias en el desempeño económico de los países. Las medidas de eficiencia indican que los países de ingresos altos son más eficientes que los países de ingresos bajos y medios, lo que sugiere que hay espacio para mejorar el desempeño económico en países con un nivel de ingresos más bajo. Mejores instituciones también son esenciales para fomentar el crecimiento económico de los países. **** ABSTRACT: In this paper, a global production frontier is estimated using stochastic frontier models to assess the contribution of transport infrastructure to countries’ performance. We find that the role of infrastructure is underestimated under the exogeneity assumption indicating that handling endogeneity is crucial in the estimation. Results suggest that a better endowment of infrastructure contributes to economic growth, highlighting its importance in explaining differences in the economic performance of countries. Efficiency measures indicate that high-income countries are more efficient than low- and middle-income countries, suggesting that there is room for improving economic performance in countries with a lower income level. Better institutions also are essential to foster countries’ economic output.

Suggested Citation

  • Ligia Alba Melo-Becerra & María Teresa Ramírez-Giraldo, 2021. "Transport infrastructure and technical efficiency in a panel of countries: Accounting for endogeneity in a stochastic frontier model," Borradores de Economia 1187, Banco de la Republica de Colombia.
    • Handle: RePEc:bdr:borrec:1187
    DOI: 10.32468/be.1187
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    More about this item

    Keywords

    Transport infrastructure; stochastic frontier; efficiency; endogeneity; Infraestructura; Transporte; Frontera estocástica; eficiencia; endogeneidad;
    All these keywords.

    JEL classification:

    • H54 - Public Economics - - National Government Expenditures and Related Policies - - - Infrastructures
    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
    • C19 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Other

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