Measuring trade efficiency

In this paper we use the Data Envelopment Analysis (DEA) window method to compare trade efficiency for 16 OECD countries and for the time period 1996–2000. From the analysis we obtained the efficiency scores and the optimal output levels for inefficient countries for all years under consideration. Results drawn from the broadly used ratio analysis were also compared to those derived from the DEA model. It seems that trade efficient countries have clear characteristics. These are the low exchange rates for exports, low R&D intensity, high value intra industry trade, and with positive effect of trade on their GDP.