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Productive efficiency, technological change and catch up within Africa

Emmanuel Mensah (), Solomon Owusu and Neil Foster-McGregor ()

No 2020-033, MERIT Working Papers from United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT)

Abstract: The peculiar nature of African development presents unique technological challenges. This often requires African-induced innovation or a combination of frontier and local technologies to solve problems unique to Africa. However, most researchers study technological change in Africa in relation to some globally defined technology frontier. The diffusion of knowledge from this global frontier to other regions however decreases in intensity with geographic and relational distance. Given that African countries are geographically and relationally close to each other, this paper makes a departure from this existing literature and studies technological change and technological catch up within African by considering catch-up with respect to an African technology leader. We do this by using structural methods (Shift and Share catch-up decomposition) and nonparametric methods (Data Envelopment Analysis) to estimate an African production frontier. We further measure productivity change in sub-Saharan Africa and disentangle the change due to general technological progress and efficiency change using the Malmquist Productivity Index (MPI). Our results show that Botswana and Mauritius are the only two countries in Africa which have converged to the productivity level as well as the efficiency level of the frontier. This successful convergence is driven more by efficiency catch-up and less by technological change. We explore the special role of efficiency catch-up by decomposing it into within-sector convergence, between -sector convergence and initial specialization. The results highlight the special role of structural change in catch-up. This paper contributes to recent evidence suggesting that countries can climb up the income ladder at a faster rate through a two-pronged transformation – i.e. structural change and technological catch-up.

Keywords: Africa; Technological change; Technological Catch-up; Economic Growth (search for similar items in EconPapers)
JEL-codes: N17 O30 O47 (search for similar items in EconPapers)
Date: 2020-08-04
New Economics Papers: this item is included in nep-afr, nep-eff, nep-gro, nep-ino and nep-tid
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