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Frontier production functions are estimated for industrial sectors in four East European countries (GDR, Czechoslovakia, Hungary and Poland), for the period from 1960 to the mid-1980s. The major purpose is to identify more fully than in previous research the factors leading to the slowdown in industrial growth. The estimation of frontier production functions allows one to separate some of the effects of changes in the efficiency with which inputs are used from other influences on factor productivity growth, such as technological change. The results indicate that increasing inefficiency in the late 1970s and early 1980s does contribute to the slowdown in economic growth, but that this effect is small. Consistent with previous research, decreases in input growth rates, and decreases in the rate of factor productivity growth for other reasons, remain more important explanations of the growth slowdown.


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