Economic Growth and Input Use Efficiency in Low, Upper -Middle and High Incomed Countries (1991-2011): A Data Envelopment Analysis

Abstract

Abstract This paper tries to examine the relationship between the input use efficiency and economic growth for low income, upper-middle income and high income countries over the period 1991 to 2011 using data envelopment analysis (DEA). Input (labor, capital and energy) use efficiency may be defined as the ratio of input use to gross domestic product. However, this ratio or measurement is not a good indicator of input use efficiency. Improvements in input use refer to a reduction in input used for a given output or GDP, then they indicate input use efficiency. Hence, either deterministic (DEA) or non-deterministic (stochastic frontier approach) approaches within the framework of production theory have been used to measure input use efficiency. This paper also aims to make some policy implications on input use efficiency.