erc/metu
INTERNATIONAL CONFERENCE IN ECONOMICS  IV
September 13-16, 2000, Ankara

Technical Efficiency of Industrial Robot Use: An Analisys on the OECD Manufacturing Industry

Jo-Hui Chen (Chung Yuan Christian University, Rep. of China)

Abstract

This study examines the determinants of technical efficiency index in the eight OECD countries using pooled time series and cross-section data from 1981 to 1994. To the best of our knowledge, we do not know of any study that is as exhaustive in empirical content as this one. Using a stochastic frontier production approach with industrial robots, we observe private capital, labor, and public capita have significant differences in production efficiency. After employing the fixed and random effects model with autocorrlation in the structure change framework, this paper revealed that the market size, employment growth, public expenditures, and agglomeration effect influenced technical efficient index across countries. The results strongly indicate that increasing R&D expenditure and production per capita may experience a drop in the efficiency index. The results contradict the common view that R&D and production influence the improvement of technical efficiency index in the diffusion of industrial robots. We demonstrate that population density, urban population, and education expenditure are influential factors to affect efficiency index of manufacturing sector across countries. To improve the country's international competitiveness, government may set up national robot association to provide effective consultancy, special training programs, promotion campaigns, and maintenance discipline to make robots use a success. It is not difficult to conclude that market size and labor growth have a positive effect on the efficiency index without industrial robots. Nevertheless, both factors may not appropriately reflect the efficiency index in the diffusion of industrial robots.

Economic Research Center
Middle East Technical University
06531 Ankara Turkey
Phone: + 90 312 210 3044, 210 2003
Fax: +90 312 210 1244
e-mail: metuerc@metu.edu.tr