Financial development and productive inefficiency: a robust conditional directional distance function approach

Mallick, Sushanta; Matousek, Roman; Tzeremes, Nickolaos G.

Abstract

This paper examines whether the level of financial development helps lower countries’ inefficiency using time-dependent robust conditional directional distance functions in a sample of 91 countries over 1970–2011. The overall results reveal that the effect of financial development on countries’ productive inefficiency is highly nonlinear, and depends on countries’ income levels, suggesting that higher levels of financial development are enhancing more countries’ catching-up ability rather than their technological change.

Citation

Mallick, S., Matousek, R., & Tzeremes, N. G. (2016). Financial development and productive inefficiency: a robust conditional directional distance function approach. Economics Letters, 145, https://doi.org/10.1016/j.econlet.2016.06.019

• Journal Article Type: Article
• Acceptance Date: Jun 12, 2016
• Online Publication Date: Jun 16, 2016
• Publication Date: Aug 1, 2016
• Deposit Date: May 9, 2018
• Publicly Available Date: May 9, 2018
• Journal: Economics Letters
• Print ISSN: 0165-1765
• Electronic ISSN: 1873-7374
• Publisher: Elsevier
• Peer Reviewed: Peer Reviewed
• Volume: 145
• DOI: https://doi.org/10.1016/j.econlet.2016.06.019
• Keywords: Financial development; Technological change; Technological catch-up; Productive inefficiencies; Robust directional distance functions
• Public URL: https://nottingham-repository.worktribe.com/output/975562
• Publisher URL: https://www.sciencedirect.com/science/article/pii/S0165176516302233?via%3Dihub
• Contract Date: May 9, 2018