Cross-country Differences in Technology: The Case of the Food Processing Industry

In this study, cross-country differences in the food processing industry's technology are investigated. A value-added function is estimated using panel data comprising of 13 developed countries and the 1975–95 period. Evidence of nonconstant returns to scale and differences in technology across countries is statistically significant. The United States is the leader in terms of the level of total factor productivity followed by Japan, Germany, France and Canada in that order. The growth rates and levels of productivity are inversely related, and the speed of productivity convergence is 2.6% per year. In addition to impacting future growth and international trade analyses, the study has implications for competitiveness of the food processing industry.