AN INTERNATIONAL COMPARISON OF INDUSTRIAL EFFICIENCY: PERU AND THE UNITED STATES.

This article attempts to measure the efficiency of eleven manufacturing industries in Peru and the United States. The first section describes how the production function was estimated. The second and third sections deal with the treatment of capital and economies of scale. The main empirical results and a discussion of their interpretation are contained in the fourth section. The fifth section comments on the differences in efficiency among industries and the implications of these differences for the Heckscher-Ohlin Theory of international trade. Economists have compiled a great deal of information on changes in labor productivity over a period of time. By contrast, careful studies on intercountry differences in productivity are few in number. Recently much research has been done on the time-series data in an attempt to measure the increase in total factor productivity. Very little research has been done on the measurement of international differences in the level of total factor productivity, or what is called the level of efficiency. The present article is concerned with this relatively neglected area.