Technological Diffusion and Productivity Convergence: A Study for Manufacturing in the OECD

In this article is investigated the issue of total factor productivity convergence through international technological diffusion on disaggregate manufacturing panel data from 1970 to 1995 with respect to a set of OECD countries. Estimates of alternate growth equations imply conditional convergence in all industries. Leaving out the conditioning variables still implies a significant catch-up effect in a great majority of industries. These same industries are also characterized by a-convergence and by a tendency toward a unimodal distribution of relative productivity levels. These results suggest that, during the period of investigation, total factor productivity growth performances in OECD manufacturing were dominated by transitional dynamics. Evidence in favor of the presence of a unit root in the technology gap between frontier and non-frontier countries is, therefore, misleading.