| Περίληψη: | In this dissertation, we investigate the role of two external factors in generating improved Productivity performance of countries. These are the quality of institutions and the extent of innovations. A two-stage Data Envelopment Analysis (DEA) method is used to estimate efficiency of 79 countries over the period 1990-2010. In the first phase of the study, technical efficiency and scale efficiency scores were estimated by using DEA. Inputs in the DEA analysis included capital stock, employment and energy use and one output the GDP per country. In the second stage, the estimated DEA efficiency scores are regressed on some institutional and contextual environmental variables using a Tobit model. In these cross-section models efficiency differences between countries proved to be considerable and they were correlated with three ‘levels’ of institutions ,legal, economic and political and the number of patents for each country. The evidence suggests a link between the quality of institutions and innovations and growth, but we find little evidence of a robust link between them. We consider why this might be the case and argue that mis-measurement, mis-specification, complexity and non-linearity are all relevant factors.
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