Technical Efficiency and Economic Growth in the SADC Region

The aim of this study is to investigate the determinants of technical efficiency in the SADC countries, over the period 1985 to 2014. A stochastic frontier analysis based on the Cobb-Douglas production functional model and various datasets (Penn World Tables and the World Development Indicators) are applied to estimate the technical efficiency of output among SADC countries. The results of stochastic frontier production approach present a positive and significant impact of labour, capital and human capital on economic growth, consistent with many studies in this field. The result of the technical inefficient model shows that government expenditure presents a negative and statistically significant estimates on technical inefficiency, while trade openness is found to have a negative but insignificant effect on technical inefficiency. The study recommends that investing in human capital, labour, capital and sources of technical efficiency should continue to be a major focus of enhancing its pro‐growth efforts in the SADC region.