Is Telecommunications Productivity Characterized by Steady State Conditions? Some Empirical Evidence for 13 OECD Countries

Abstract

This paper studies the convergence process, or lack thereof, of Total Factor Productivity (TFP) for a panel of 13 OECD countries over the period 1979-2007, adding breadth and depth to the convergence debate in the telecommunications industry. TFP growth is examined through the Malmquist Index and decomposed in its main determinates. Absolute and conditional convergences are estimated. Fixed-effects estimates across countries convert the cross-section test of absolute convergence into a pooled test of conditional convergence. Our findings show a growth in TFP, mainly driven by technological process. It is boosted by an increase in production possibilities and lack of bias in input utilization. Inefficiency in scale is found. Convergence tests do not suggest support in favor of absolute convergence but do exhibit evidence of conditional convergenceTotal Factor Productivity (TFP), Data Envelopment Analysis (DEA), conditional b-convergence; Fixed Effects Model.