Total factor productivity (TFP), factor accumulation, and growth are analysed for a panel of 40 countries in 2001–11. TFP growth and technical inefficiency are estimated using a stochastic frontier model. Environmental variables are found to have an important role in explaining differences in inefficiency across countries. Over 2001–11, the general improvement in technical efficiency of countries is almost outweighed by technological regress. Results indicate that differences in factor accumulation between OECD and emerging economies are more important than differences in TFP change to explain differences in economic growth. Results also indicate negative and significant random shocks for the OECD countries. Keywords: economic growth, total factor productivity, technical efficiency, en vironmental variables, stochastic frontier analysis JEL classification number: C51, O12, O47, O57 I. INTRODUCTION Jones and Romer (2010) select the large differences in income across countries as one of the new stylized facts of growth.1 Why are some countries far richer than others? In order to understand the enormous disparities in economic performance across countries, we should investigate first the determinants of economic growth, that is, factors that explain the increase in a country's income per capita over a long period of time. Determining the sources of discrepancies in the levels of production, and consequently in the standards of living, across countries, is a demanding and c
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