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Testing for the Stationarity in Total Factor Productivity: Nonlinearity Evidence from 79 Countries

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  • Sakiru Adebola Solarin

    (Multimedia University)

Abstract

Several studies have conducted empirical research on different aspects of total factor productivity. However, the estimation of its degree of integration, which has important usefulness for policy formulation, forecasting purposes and econometric modeling, has been greatly overlooked in the literature. The purpose of this paper is to examine the stationarity properties of total factor productivity in 79 economies for the period 1970–2011. Using a newly constructed dataset and a new nonstationarity test that provide for nonlinearity in the estimations, the empirical results show that the series in 67 countries (or 85 % of the total sample) follow the unit root process. In other words, the total factor productivity in these countries are integrated of order one. For the remaining 12 countries (or 15 % of the total sample), we observe that the series exhibit stationary process. We discuss the policy implications of these findings and offer suggestions for further research.

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  • Sakiru Adebola Solarin, 2017. "Testing for the Stationarity in Total Factor Productivity: Nonlinearity Evidence from 79 Countries," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 8(1), pages 141-158, March.
    • Handle: RePEc:spr:jknowl:v:8:y:2017:i:1:d:10.1007_s13132-015-0265-4
    DOI: 10.1007/s13132-015-0265-4
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    1. Luis A. Gil-Alana & Sakiru Adebola Solarin & Mehmet Balcilar & Rangan Gupta, 2023. "Productivity and GDP: international evidence of persistence and trends over 130 years of data," Empirical Economics, Springer, vol. 64(3), pages 1219-1246, March.
    2. Claudiu Tiberiu Albulescu & Serban Miclea, 2020. "Firm-level total factor productivity convergence in German electricity and gas industry," Working Papers hal-02512939, HAL.

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