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

Sakiru Solarin

Journal of the Knowledge Economy, 2017, vol. 8, issue 1, No 7, 158 pages

Abstract: 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.

Keywords: Total factor productivity; Unit roots; Nonlinearity; Time series data (search for similar items in EconPapers)
Date: 2017
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Citations: View citations in EconPapers (3)

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DOI: 10.1007/s13132-015-0265-4

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