Agricultural Productivity and Convergence: Europe and the United States

Abstract

This paper applies the Window Malmquist Index (WMI) approach to measure chanages in agricultural total factor productivity (TFP) for the United States and a sample of nine European countries for the period 1973 to 1993. The data set used in this paper is obtained from Ball et al. (2001). The WMI is constructed by combining DEA window analysis with the Malmquist index approach. Furthermore the Kruskal and Wallis rank test is used for testing frontier shift among observed periods. The paper also explores the question of convergence in TFP across the countries under consideration, by testing for beta and sigma convergence, as well as for stochastic or long-run convergence. The results show wide variation in the rate of TFP growth across countries with an average trend growth of 1.62%. The results indicate the presence of beta convergence but the absence of sigma convergence for the full period under consideration but the presence of both beta and sigma convergence for the sub-period 1983-1993. Finally, a wide spectrum of panel unit root test results support the presence of long-run convergence among the sample countries.

Keywords: Window Malmquist Index, Convergence, Panel Unit Root Tests

JEL Classification: O13, C23