PRODUCTIVITY, EFFICIENCY AND TECHNOLOGICAL CHANGE IN EUROPEAN UNION REGIONAL MANUFACTURING: A DATA ENVELOPMENT ANALYSIS APPROACH*

Abstract

Using data envelopment analysis, we calculate indices of total factor productivity (TFP), efficiency and technological change for the manufacturing sectors of 68 European NUTS1 regions over the period 1986–2002. We subsequently examine these indices using exploratory spatial data analysis (ESDA) techniques, before considering tendencies towards convergence in both TFP and technical efficiency levels. While the ESDA reveals significant spatial autocorrelation, the convergence analysis uncovers no tendency for regions with initially lower TFP to catch up with regions with initially higher TFP. However, convergence is found in levels of technical efficiency, although towards a relatively lower average level.