Convergence and productive efficiency in fourteen OECD countries: A non-parametric frontier approach

This paper explores the use of a non-parametric frontier approach to analyse multi-factor productivity across time and countries. We argue that conventional measures of total factor productivity involve some restrictive assumptions that might bias the results. A non-parametric approach avoids these assumptions. The model uses linear programming techniques to examine the productivity catching-up in 14 OECD countries over the 1970–1990 period, under the assumption of variable returns to scale. We find evidence of convergence, even if at quite different speeds, for total industry, for manufacturing and for services.