Convergence of total factor productivity in Southern Brazilian agriculture

Abstract

The aim of this work was to estimate the total factor productivity (TFP) of agriculture in the microregions of southern Brazil in the period 2006-2017 to verify if there is a convergence process involving their respective growth rates. The calculation of the performance indicator in this case was based on the DEA-Malmquist procedure, which decomposes the growth rate of PTF into an index of change in technical efficiency (EFF) and technological change (TEC). Concerning convergence, the equations involved were estimated by the technique of spatial econometrics, whose diagnosis of spatial dependence was favorable to the spatial autoregressive error model (SEM). With the analysis of the results, it was first noticed that the increase in agricultural TFP was driven more by the technological change index (TEC); on the other hand, the index of change in technical efficiency (EFF) seemed to influence the PTF convergence mechanism more. Second, the spatial econometric specifications of absolute and conditional convergence estimated for PTF corroborated the idea that the productivity trajectory is heading towards an equalization of growth rates. It is noteworthy that the inclusion of spatial dependence variables (spatially lagged error term) and the microregion structural characteristics vector in the estimated equations served to accelerate the convergence process.