TFP in Tunisian Manufacturing Sectors: Convergence or Catch-Up with OECD Members?

Abstract

Total Factor Productivity (TFP) is analyzed for six Tunisian manufacturing sectors: food processing, electrical and metal products, chemical activities, textiles, clothing and leather, building materials and ceramics, miscellaneous products. First, sector-based TFP are calculated over a long period (1983–2002) as well as some sub-periods reflecting changes of local economic policy. Then, using an accounting framework, we decompose the industrial productivity into a reallocation effect (i.e., variation in the relative distribution of sectoral value added), and a pure productivity effect (i.e., the sectoral value-added shares being constant). Secondly, through panel data unit root tests, TFP long-term convergence with or without catch-up is examined with respect to the productive performance of OECD members. Each of the six Tunisian manufacturing sectors is benchmarked by the productive performance of OECD members. The Dickey–Fuller type test that we use allows us to take into account the potential correlation across OECD countries. The empirical analysis highlights two main findings. TFP convergence and catch-up have generally been a joint process. Moreover, the sectors where catch-up occurred were those with the best productive performance and those that succeeded in reducing the productivity gap with regard to the best OECD performers.

Keywords:

• Productivity
• convergence
• catch-up
• panel unit root