A reassessment of total factor productivity convergence: Evidence from cross-country analysis

• Published in: Economic modelling Vol. 82; pp. 87 - 98
• Main Authors: Rath, Badri Narayan, Akram, Vaseem
• Format: Journal Article
• Language: English
• Published: Elsevier B.V 01.11.2019
• Subjects: Convergence; LM and RALS-LM unit root tests; Phillips and sul panel club convergence; TFP; LM and RALS-LM unit root tests; C22; O47; C23; Phillips and sul panel club convergence; TFP; Convergence
• ISSN: 0264-9993; 1873-6122
• DOI: 10.1016/j.econmod.2019.08.002

This study revisits total factor productivity (TFP) convergence by employing the latest Lagrange multiplier and residual augmented least squares Lagrange multiplier unit root tests and Phillips and Sul panel club convergence technique. The study uses annual data for 44 developing and 29 developed countries covering the time-period 1970–2014. Our findings from these unit root tests support evidence of TFP convergence. Region-based results (Africa, Asia, and Latin America and the Caribbean) also confirm TFP convergence. Further, results derived from the Phillips and Sul test support evidence of TFP convergence, although the speed of convergence varies by region. The highest speed is noted in the Asia region, whereas, the lowest of speed productivity convergence is observed in the Africa region. •Reassess total factor productivity (TFP) convergence.•The LM and RALS-LM unit root tests and panel club convergence results show evidence of TFP convergence.•TFP convergence speed varies across regions.•The highest TFP convergence speed is in the Asia region and the lowest is in Africa.