Technological Change, Capital Deepening and Agricultural TFP Growth: Evidence from Cross-country Comparison of 18 OECD Countries

This paper employs deterministic production-frontier analysis (DEA) to evaluate technological progress and its role in agricultural total factor productivity (TFP) growth across OECD countries over the past four decades. Using a newly developed production accounting dataset covering agricultural TFP of 18 OECD countries from 1973 to 2015, we estimate annual production frontier shifts and decompose these changes over three 15-year intervals (1973–1987, 1987–2001, and 2001–2015) into components of technological progress, efficiency gains, and capital deepening. Our findings indicate that technological progress, while partly offsetting changes in input scale, has consistently been the primary driver of agricultural TFP growth among OECD countries. However, since 2000, technological progress in agriculture has decelerated, coinciding with transformative advancements in biological and digital technologies that have accelerated industrial productivity. This shift has redirected agricultural technological progress away from Hicks-neutral improvements towards a labor-augmenting path that benefits capital-intensive economies, contributing to the observed deceleration in agricultural TFP growth across countries. JEL Code : O13; K10