Technology Transfer and National Efficiency: Does Absorptive Capacity Matter?

This paper explores the moderating effects of absorptive capacity on the role of technology transfer in explaining cross-country differences in national efficiency. We used data from 18 sub-Saharan Africa countries over the period 1970-2010 and adopted a stochastic frontier approach. The empirical results show that the coefficients of the interaction terms for measures of technology transfer (trade and machinery imports) and absorptive capacity (relative R&D) are negative and statistically significant. This suggests that absorptive capacity positively influences the degree to which technology transfer affects the efficiency of countries in sub-Saharan Africa.