Technology transfer, adoption of technology and the efficiency of nations: Empirical evidence from sub Saharan Africa

In this paper, stochastic frontier analysis is employed to examine the role of technology transfer and absorption of technology, as well as the interaction between technology transfer and absorption in explaining cross country differences in efficiency of nations in sub Saharan Africa over the period 1970-2010. The findings of the study indicate that trade openness, machinery imports, human capital and relative research and development have no empirically apparent effect on efficiency of nations in sub Saharan Africa. However, the interaction term for trade openness and human capital, and that of machinery imports and relative research and development play a significant and quantitatively important role in explaining national efficiency in sub Saharan Africa. The findings imply that policy initiatives to boost national efficiency in sub Saharan Africa must focus on the development of domestic capacity to absorb technology.