Total Factor Productivity and Efficiency in OECD Countries: Possibility of Convergence in 2000-2012 Period

This study discusses efficiency, productivity, and the existence of convergence in 34 OECD countries between 2000 and 2012. Physical capital per worker and human capital per worker are used as inputs to determine total factor productivity and efficiency scores in data envelopment analysis while GDP per worker is used as the output. Efficiency scores observed in CCR and BCC models indicate that Latin American and Eastern European countries are more efficient. Analysis of productivity by using the Malmquist Index indicates that productivity was positive but increased less than 1 percent at the end of the period. Panel regression estimation is used for standard deviations of convergence and to determine beta convergence. If GDP per worker is (yi), there is convergence between log(yi/yi,t-T,) and starting values log(yi,t-T); however, the convergence effect of TFP values could not be determined. Similar results are reported for Sigma convergence.