Exploring the Role of Institutions in Cross Country Malmquist Productivity Analysis: A Two-Stage Double Bootstrap DEA Approach

22 Pages Posted: 8 Dec 2018 Last revised: 20 May 2022

See all articles by Danish Ahmed Siddiqui

Danish Ahmed Siddiqui

University of Karachi - Karachi University Business School

Qazi Masood Ahmed

University of Karachi

Date Written: November 14, 2018

Abstract

This paper explore the role of institutions to enhance the productivity growth across countries using a two stage Double Bootstrap Data Envelopment Analysis (DEA). The productivity growth is calculated on the basis of Malmquist productivity index. It also explores the sources of productivity growth and the influence of different types of institutions [Siddiqui and Ahmed (2013a)] on them. In the first stage, productivity growth and its decompositions a) technological change and b) efficiency change are estimated for a period of 1990-2000 for 78 countries. In the second stage, the impact of institutions on these estimates is analyzed through a bootstrapped regression. Findings suggest that institutions played a strong and positive role in enhancing cross country productivity mainly through promoting technological change but the evidences of institutions influencing efficiency change are not found. This study also shows that institutions that curb corruption, bureaucratic inefficiencies, lax regulations and unfriendly business policies, tend to have a larger effect on productivity growth than other two indices that curb political rents and that reduces transactional risks. However when they are aggregated, their impact is more pronounced than their combined individual impacts.

Keywords: institutions; Malmquist; DEA; Productivity

JEL Classification: C23, D24, Q22, O 43, Z13

Suggested Citation

Siddiqui, Danish Ahmed and Ahmed, Qazi Masood, Exploring the Role of Institutions in Cross Country Malmquist Productivity Analysis: A Two-Stage Double Bootstrap DEA Approach (November 14, 2018). Available at SSRN: https://ssrn.com/abstract=3284617 or http://dx.doi.org/10.2139/ssrn.3284617

Danish Ahmed Siddiqui (Contact Author)

University of Karachi - Karachi University Business School ( email )

University Road
Karachi, Sindh 75270
Pakistan
3333485884 (Phone)

Qazi Masood Ahmed

University of Karachi ( email )

University Road
Karachi, Sindh 75270
Pakistan

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