Is it factor accumulation or total factor productivity explaining the economic growth in ECOWAS? An empirical assessment

Abstract

The purpose of this paper is to examine the sources of economic growth for the ECOWAS countries and to disentangle the relative contribution of each source. Malmquist Productivity Index decomposition is used to distinguish between technical efficiency versus technological change. In addition, an OLS and panel regression is used to estimate the contribution of various sources of growth to increases in GDP per capita. The paper concludes that 1) there was a modest increase in Productivity Index in ECOWAS countries (11.1% between 1981 and 2015) and 2) both factor accumulation and total factor productivity drive the economic growth with technological change and efficiency change being significantly greater contributors.

Keywords: Total factor productivity, Malmquist Productivity Index Economic Growth, ECOWAS, Fixed Effect, Random Effect