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External debt, state ownership and technical efficiency: a stochastic frontier analysis of emerging economies

Arguing that the litmus test of external debt sustainability should be based on total factor productivity growth instead of mere GDP growth, this study examines the effect of external debt on total factor productivity through technical efficiency change using the Stochastic Frontier Analysis method....

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Main Authors: Yap, Woon Kan, Kamarudin, Fakarudin, Gryzelius, Jenny
Format: Article
Language:English
Published: Springer Nature 2024
Online Access:http://psasir.upm.edu.my/id/eprint/115657/1/115657.pdf
http://psasir.upm.edu.my/id/eprint/115657/
https://link.springer.com/article/10.1007/s10258-024-00255-8?error=cookies_not_supported&code=91cb030f-3842-4249-87a5-d6f121c7eb3d
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spelling my.upm.eprints.1156572025-03-13T01:19:39Z http://psasir.upm.edu.my/id/eprint/115657/ External debt, state ownership and technical efficiency: a stochastic frontier analysis of emerging economies Yap, Woon Kan Kamarudin, Fakarudin Gryzelius, Jenny Arguing that the litmus test of external debt sustainability should be based on total factor productivity growth instead of mere GDP growth, this study examines the effect of external debt on total factor productivity through technical efficiency change using the Stochastic Frontier Analysis method. To deepen the analysis, the dynamics of technical efficiency, public sector external debt and state ownership are also investigated in this study. The results show that external debt of the private sector increases total factor productivity by improving technical efficiency, whereas the contrary is true with regard to external debt of the public sector. Hence, between the public and private sectors, the latter shows greater efficiency in allocating and using external debt. Nonetheless, the negative impact of public sector external debt on technical efficiency can be mitigated by transferring state-owned assets to the private sector through privatization. Springer Nature 2024-04-13 Article PeerReviewed text en http://psasir.upm.edu.my/id/eprint/115657/1/115657.pdf Yap, Woon Kan and Kamarudin, Fakarudin and Gryzelius, Jenny (2024) External debt, state ownership and technical efficiency: a stochastic frontier analysis of emerging economies. Portuguese Economic Journal, 24 (1). art. no. 100091. pp. 123-150. ISSN 1617-982X; eISSN: 1617-9838 https://link.springer.com/article/10.1007/s10258-024-00255-8?error=cookies_not_supported&code=91cb030f-3842-4249-87a5-d6f121c7eb3d 10.1007/s10258-024-00255-8
institution Universiti Putra Malaysia
building UPM Library
collection Institutional Repository
continent Asia
country Malaysia
content_provider Universiti Putra Malaysia
content_source UPM Institutional Repository
url_provider http://psasir.upm.edu.my/
language English
description Arguing that the litmus test of external debt sustainability should be based on total factor productivity growth instead of mere GDP growth, this study examines the effect of external debt on total factor productivity through technical efficiency change using the Stochastic Frontier Analysis method. To deepen the analysis, the dynamics of technical efficiency, public sector external debt and state ownership are also investigated in this study. The results show that external debt of the private sector increases total factor productivity by improving technical efficiency, whereas the contrary is true with regard to external debt of the public sector. Hence, between the public and private sectors, the latter shows greater efficiency in allocating and using external debt. Nonetheless, the negative impact of public sector external debt on technical efficiency can be mitigated by transferring state-owned assets to the private sector through privatization.
format Article
author Yap, Woon Kan
Kamarudin, Fakarudin
Gryzelius, Jenny
spellingShingle Yap, Woon Kan
Kamarudin, Fakarudin
Gryzelius, Jenny
External debt, state ownership and technical efficiency: a stochastic frontier analysis of emerging economies
author_facet Yap, Woon Kan
Kamarudin, Fakarudin
Gryzelius, Jenny
author_sort Yap, Woon Kan
title External debt, state ownership and technical efficiency: a stochastic frontier analysis of emerging economies
title_short External debt, state ownership and technical efficiency: a stochastic frontier analysis of emerging economies
title_full External debt, state ownership and technical efficiency: a stochastic frontier analysis of emerging economies
title_fullStr External debt, state ownership and technical efficiency: a stochastic frontier analysis of emerging economies
title_full_unstemmed External debt, state ownership and technical efficiency: a stochastic frontier analysis of emerging economies
title_sort external debt, state ownership and technical efficiency: a stochastic frontier analysis of emerging economies
publisher Springer Nature
publishDate 2024
url http://psasir.upm.edu.my/id/eprint/115657/1/115657.pdf
http://psasir.upm.edu.my/id/eprint/115657/
https://link.springer.com/article/10.1007/s10258-024-00255-8?error=cookies_not_supported&code=91cb030f-3842-4249-87a5-d6f121c7eb3d
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score 13.251813

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