Total Factor Productivity within the Tunisian manufacturing sectors and international convergence with OECD countries

The purpose of this paper is to examine Total Factor Productivity (TFP) of six Tunisian manufacturing sectors and to compare these productivities with those of OECD countries. The analysis covers the period 1983-1999. First, TFP is measured and some of the main economic and financial determinants are identified. In carrying out this econometric exercise we are careful to take into account the problem of the direction of causality between variables. For the empirical analysis, panel data causality tests are conducted. The results suggest that TFP growth rates are sensitive to variables reflecting international openness. Secondly, the paper investigates the evolution of the TFP gaps between Tunisia and OECD countries. A stochastic convergence has been considered here. Two panel data unit root tests are employed. A global convergence is evidenced for five sectors.