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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

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  • Koengkan, Matheus
  • Fuinhas, José Alberto
  • Kazemzadeh, Emad
  • Osmani, Fariba
  • Alavijeh, Nooshin Karimi
  • Auza, Anna
  • Teixeira, Mônica

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.

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  • Koengkan, Matheus & Fuinhas, José Alberto & Kazemzadeh, Emad & Osmani, Fariba & Alavijeh, Nooshin Karimi & Auza, Anna & Teixeira, Mônica, 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, Elsevier, vol. 169(C), pages 43-54.
    • Handle: RePEc:eee:inteco:v:169:y:2022:i:c:p:43-54
    DOI: 10.1016/j.inteco.2021.11.004
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    2. 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.
    3. 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.
    4. 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.
    5. 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).
    6. 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.
    7. 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.
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    9. 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.

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    More about this item

    Keywords

    Stochastic frontier analysis; Economic performance; Latin American and Caribbean countries;
    All these keywords.

    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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