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Absorptive Capacity and Efficiency: A Comparative Stochastic Frontier Approach Using Sectoral Data

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  • Letizia Montinari

    () (IMT Lucca Institute for Advanced Studies)

  • Michael Rochlitz

    () (IMT Lucca Institute for Advanced Studies)

Abstract

In this paper, we investigate differences in and determinants of technical efficiency across three groups of OECD, Asian and Latin American countries. As technical efficiency determines the capacity with which countries absorb technology produced abroad, these differences are important to understand differences in growth and productivity across countries, especially for developing countries which depend to a large extend on foreign technology. Using a stochastic frontier framework and data for 22 manufacturing sectors for 1996-2005, we find notable differences in technical efficiency between the three country groups we examine. We then investigate the effect of human capital and domestic R&D, proxied by the stock of patents, on technical efficiency. We find that while human capital has always a strongly positive effect on efficiency, an increase in the stock of patents has positive effects on efficiency in high-tech sectors, but negative effects in low-tech sectors.

Suggested Citation

  • Letizia Montinari & Michael Rochlitz, 2012. "Absorptive Capacity and Efficiency: A Comparative Stochastic Frontier Approach Using Sectoral Data," Working Papers 4/2012, IMT Institute for Advanced Studies Lucca, revised Jun 2012.
  • Handle: RePEc:ial:wpaper:4/2012
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    References listed on IDEAS

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    More about this item

    Keywords

    absorptive capacity; efficiency; stochastic frontier analysis;

    JEL classification:

    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

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