Table 4 presents the estimation results of the production frontiers. In most industries, the sum of the coefficients relative to labor and capital inputs is close to one. It is a little bit higher for some sectors than can be suspected to face investment indivisibilities. In comparison with other sectors, _Textile_ is probably the most exposed to the competition and the production technology does not reject this hypothesis. For all industries, the coefficients are strongly statistically significant at the 99% level of confidence.

**Table 5. Firm-Level Technical Efficiency**

_<u>(Country average, in % of country with the most productive firms)</u>_

|**Country***|**Textile**|**Leather**|**Garment**|**Agro**<br>**Processing**|**Metal&**<br>**Machinery**<br>**Products**|**Chemic**<br>**& Pharm**<br>**Products**|**Wood**<br>**&**<br>**Furniture**|**Non Metal**<br>**& Plastic**<br>**Materials**|
|---|---|---|---|---|---|---|---|---|
|**South-Africa **2003|85||**100**|**100**|**100**|89|**100**|**100**|
|**Brazil**2003|**100**|**100**|87|80|98|**100**|62||
|**_Morocco _**_2004_|_58_|_70 _|_81_|_70 _|**_100_**|_72 _||_92 _|
|**_Saudi-Arabia _**_2005_||||_72 _|_76 _||_81_||
|**_Morocco _**_2000_|67|76|80|71|68|83||70|
|**Thailand **2004|64||93|67|65||47|66|
|**Ecuador **2003|57|86|61|61|63|60|57|63|
|**ElSalvador **2003|40|62|65|58|55|63||66|
|**Guatemala **2003|51||77|45|57|45|48|67|
|**Honduras **2003|58||66|42|48|60|37|48|
|**India **2000|47||66||45|34|||
|**India **2002|42|56|66|41|46|32|||
|**Pakistan **2002|43|49|61|40||31|||
|**China **2002|46|45|51||35||||
|**Philippines **2003|36||53|39|||||
|**_Algeria _**_2002_|_33_|||_35_|_39_|_38_||_54_|
|**Nicaragua **2003|22|55|41|34|38|30|31|49|
|**Tanzania **2003||||43|||32||
|**Zambia **2002|29|||30|41|21|||
|**Sri Lanka **2004|17||37|26|33|||39|
|**Bangladesh **2002|24|41|32|28||19|||
|**Ethiopia **2002|20|30|36|22|||23||
|**_Egypt _**_2004_|_21_|_30_|_21_|_17_|_22_|_17_|_19_|_32_|
|**_Egypt _**_2006_|_17_|_15_|_22_|_22_|_25_|_14_|_19_|_24_|
|**_Lebanon _**_2006_|_21_||_23_|_16_|||_13_||

_Note_ : * Ranking of countries goes from the ones with the most productive firms to the ones with the least productive firms. _Source_ . Authors’ calculations Table 4 also specifies the percentage of the residual explained by the Technical Efficiency ( _TE_ ). It can be seen that, in all industries, the efficiency term accounts for a significant part of the total residuals and is statistically significant at 99%. This result justifies the production frontier approach, against the production function approach. In this model, _TE_ explains from 24% of the error term in _Garment_ to 70% in _Non Metallic & Plastic Materials_ . _TEs_ are distributed in an interval of 0 to 1 (1 is the value of the sector’s most efficient firms; see _Annex_ 5). In Table 5, _TEs_ are in percent of the average _TE_ of the most performing country. In average, our results for Technical Efficiency ( _TE_ ) are close to the ones obtained for the non parametric _TFP_ under the hypotheses of constant returns to scale. The ranking of countries, in particular, remains unchanged. As previously, _Brazilian_ and _South African’s_ firms show the best performances in all industries, along with _Moroccan’s_ firms. Only in _Garment_ and _Leather_ , _Moroccan’s_ firms are surpassed by _Thailand_ and _Ecuador_ respectively. Ranking of MENA countries, as well, is unchanged.

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