Productive efficiency in the Caribbean and Latin America under free trade

Analysis of the Nonparametric Economic Efficiency Index revealed that measures of economic efficiency were higher in the Caribbean, but the variation in the measure was also greater in this region compared with Latin America. In both regions allocative efficiency contributed more to economic efficiency compared with technical efficiency, with the measure of allocative efficiency being greater in Latin America while measures of technical efficiency were greater in the Caribbean. Both regions showed improved economic efficiency following Covid. Regression analysis reveals that in the Caribbean, literacy rate, private sector access to credit, fixed capital formation and access to electricity have a positive impact and tax on income and the exchange rate had stronger negative impact. In Latin America, the exchange rate and market size had a stronger impact on economic efficiency.