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e-Business in the chemical, rubber and plastics industryinefficiently. Organisational or institutional failures are not revealed as they are notexplicitly included in the estimation of the stochastic production possibility frontiers.For this analysis a panel-data approach was used because of the low number ofcountries sampled. The only way a cross-section approach could be used would be bypooling industry and country data. Further trends can be drawn from the stochasticproduction possibility frontier model although a complete analysis is beyond the scope ofthis study.To incorporate intermediate inputs in the analysis, the gross production value was used,gpv of the respective industry instead of the gross value added, gva, as the outputvariable. This enables us to estimate the output elasticities 188 for intermediate inputs.m∑ln( gpv ) = β + lnx ⋅ β + v − u for i = 1,...,6i 0ij j i ij=1j.{ imi ict nict hswh mswh lswh}with x ∈ , , , , ,Combining the industries production possibility frontiers for each country to one commonproduction possibility frontier for an industry across all countries, we obtain a multicountrydata panel with a common stochastic production possibility frontier.m∑ln( gpv ) = β + lnx ⋅ β + v − u for i = 1,...,6 and j = 1,...,12ji , 0 ijj j i ji ,j=1To impose constant returns to scale we normalised the production possibility frontier bysubtracting the natural logarithm of total working hours from both sides of the equation.This normalised common production possibility frontier equates the gross productionvalue labour productivity in working hours on the left hand side with respective factorintensities such as ICT-capital intensity on the right hand side.m* * * *jt ,β ∑ ij, tβj i ji ,j=1ln( gpv ) = + lnx ⋅ + v − u for i = 1,...,6 and j = 1,...,12To include Harrod-neutral technical change in the multi-country industry commonproduction possibility frontier a time trend variable is also included. The respectiveparameter value β7measures the average TFP-growth rate. The long-term rate ofHarrod-neutral technological progress therefore determines the outward shift attributed toa steady technical change in the common production possibility frontier.m** * * * *jt ,β ∑ ij, tβjβ7 i ji ,j=1ln( gpv ) = + lnx ⋅ + ⋅ t+ v − u for i = 1,...,6 and j = 1,...,12189188 An output elasticity is a dimensionless measure for the ratio of marginal percentage changes ofoutput with regard to a particular input variable, i.e. a 1% increase in the input variable changesthe output variable by x%.e∂ ln o∂o∂xt t to, x= = = lim∂ ln xtotx ∆→0t189 The symbols used denote the following: imi - intermediate inputs, ict – ICT-capital stock, nict –Non-ICT-capital stock, hswh – high-skilled total working hours, mswh – medium-skilled totalworking hours, lswh - low-skilled total working hours.221∆oott∆xxtt.