Economic complexity and technical efficiency in developing countries: an empirical analysis



The aim of this study is to analyze the role of technical efficiency on the process of economic complexity in developing countries. For this, we have mobilized two complementary techniques. The first technique allowed us to calculate efficiency scores for a panel of 81 advanced and developing countries over a period between 1990 and 2018. The inclusion of high-income countries in the sample is used to ensure the true efficiency frontier, which would be underestimated in their absence. The results obtained by the Data Envelopment Analysis (DEA) method highlight that developing countries produced only 16% of the quantity of outputs they could have produced from their resources, compared to 51% for high-income countries. Moreover, the use of a dynamic panel data analysis on developing countries shows a non-significant impact of technical efficiency on economic complexity in, all else being equal, with disparate effects across regions.


Technical efficiency, Economic complexity index, Data Envelopment Analysis (DEA), Generalized Method of Moments (GMM), Developing countries.

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