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UNU-WIDER Economic Efficiency and Growth: Evidence from Brazil, China, and India

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A teenager wears torn rubber boots in a muddy local market in Bac Ha, Viet Nam. As of 2005 figures, half the world population—more than 3 billion people–is estimated to live on less than USD 2.50 a day. Bac Ha, Viet Nam. UN Photo/Kibae Park.

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Economic Efficiency and Growth: Evidence from Brazil, China, and India

We compare economic efficiencies in Brazil, India, and China, where economic efficiency measures the gap between potential and actual output for a given input combination and technological factor. We use stochastic production frontier models to measure the contributions of factors of production and technology to growth and estimate non-positive error terms that capture production inefficiencies in each country. The results suggest that China and India had relatively inefficient production in the early 1980s but have since improved production efficiency substantially. In the same period, production efficiency in Brazil has declined somewhat from relatively high initial levels and the gap between production efficiency between these countries has narrowed substantially, supporting more rapid growth in China and India relative to Brazil.
Publisher:
UNU-WIDER
Series:
WIDER Research Paper
Volume:
2008/86
Title:
Economic Efficiency and Growth: Evidence from Brazil, China, and India
Authors:
Nader Nazmi and Julio E. Revilla
Publication date:
October 2008
ISSN Web:
1810-2611
ISBN 13 Web:
9789292301408
Copyright holder:
© UNU-WIDER
Copyright year:
2008
Keywords:
growth, trade, production
JEL:
F43, O24
Project:
Southern Engines of Global Growth
Sponsor:
The governments of Denmark (Royal Ministry of Foreign Affairs), Finland (Ministry for Foreign Affairs), Norway (Royal Ministry of Foreign Affairs), Sweden (Swedish International Development Cooperation Agency — Sida) and the United Kingdom (Department for International Development).
Format:
online

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