How Much Technically Efficient Is The South Asian Region? An Intra-Regional Comparison Among Its Affiliates

Abstract

This study presents an analysis of the intra-regional performance of South Asian economies in terms of their productive efficiency during the period 1985–2019. A window data envelopment analysis (dea) based technique with bootstrapping is used to model the production frontier for seven South Asian economies to estimate their efficiency levels. The results show substantial differences in technical efficiency levels across South Asian economies and thus, the existence of vast potential to catch up with the best practices is revealed among these economies. On an average, the extent of technical inefficiency in south asia is about 46.92% per annum after adjusting for statistical bias. This is indicative of a huge gap in laggard and best practices within region. Both managerial and scale components of efficiency performance are equally responsible for observed production inefficiency in south asia. The existence of managerial inefficiency reflects failure of policy planners among affiliate countries to catch-up the best practices within South Asian region. However, the observed scale inefficiency (SIE) is because of the dominance of scale economies over diseconomies that urges need of enlarging cooperation among member nations. JEL Codes: F02, D240, C610