Skip to main content
Available in EnglishEspañol

Latin America: Total factor productivity and its components

Publication cover

Latin America: Total factor productivity and its components

Author: Araujo, Jair Andrade - Feitosa, Débora Gaspar - Silva, Almir Bittencourt da Physical Description: páginas. 51-6 Date: December 2014 ECLAC symbol: LC/G.2629-P

See all articles

Description

This article applies the stochastic-frontier model to examine total factor productivity (tfp) and its components in Latin America between 1960 and 2010. The likelihood-ratio test shows that, for a selection of Latin American countries over the 50 years analysed, the macroeconomic variables of technical inefficiency included in the model generally have a significant effect; and they allow for a better understanding of technical inefficiency throughout the region. The key variables explaining technical inefficiency in the selected countries are public expenditure and the inflation rate; and there is also an inverse relation between technical inefficiency and the extent to which local prices diverge from purchasing power parity.