Total Factor Productivity of Tunisia's manufacturing sectors: measurement, determinants and convergence towards OECD countries

The purpose of this paper is twofold. First, sector-based Total Factor Productivity (TFP) is calculated for six Tunisian manufacturing sectors over the period 1983-2002. Economic determinants of the productive performance are also investigated. In doing so, we take care of the direction of the causality by using a panel data Granger type-test. The recent literature in international economics has placed a particular emphasis on the relation between TFP and variables reflecting the potential impact of both trade and financial openness. Sector-based TFPs proved to be sensitive to some of these variables, highlighting a causality that does not reject the stimulating impact of exports and foreign direct investments. Second, the paper implements some panel data unit root tests to investigate the statistical hypothesis of TFP catching up of Tunisia with OECD members. In benchmarking each of the six Tunisian sectors by those of the most developed countries, panel data unit root tests do not reject the hypothesis of an overall catching- up for five of them.