Agricultural productivity and convergence: Europe and the United States

Abstract

This article applies the Window Malmquist Index (WMI) approach to measure changes in agricultural Total Factor Productivity (TFP) for the United States and a sample of nine European countries for the period 1973 to 1993. The dataset used in this article is obtained from Ball et al. (2001). The WMI is constructed by combining Data Envelopment Analysis, window analysis with the Malmquist index approach. Furthermore, the ‘Kruskal and Wallis rank test’ is used for testing frontier shifts among observed periods. The article also explores the question of convergence in TFP across the countries under consideration, by testing for β- and σ-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 rate of 1.62%. The results indicate the presence of β-convergence but the absence of σ-convergence for the full period under consideration but the presence of both β- and σ-convergence for the sub-period 1983 to 1993. Finally, a wide spectrum of panel unit root test results support the presence of long-run convergence among the sample countries.