Evaluating the green total factor productivity and convergence among emerging and resource intensive economies

This study evaluates the resource-intensive performance of South Asia, East Asia, and the Middle East by extending the slacks-based directional distance function. We use the Malmquist–Luenberger Productivity Index (MLPI) to measure Green Total Factor Productivity (GTFP) while accounting for undesirable outputs. The MLPI provides a more accurate assessment of productivity by identifying optimal improvement paths that incorporate environmental sustainability. A key advantage of the MLPI is its ability to decompose productivity change into efficiency change and technical change, allowing for the identification of the primary drivers of productivity change. Additionally, this study examines regional disparities in productivity changes and analyses convergence through β-convergence and σ-convergence. Our results showed that the overall increase in GTFP is predominantly due to the improvements in technological change across the countries. Among the regions, East Asia exhibits a relatively resilient performance, as reflected by the higher GTFPCH score. Furthermore, we observed the convergence in GTFP across countries, evident from its individual components. However, the technological change component exhibited a faster convergence rate when compared to the efficiency score. This indicates that technological advancements are harmonizing more rapidly across countries than efficiency improvements. The accelerated convergence in the technological change component highlights the critical role of technology in driving productivity parity among countries. These findings can equip policymakers with valuable insights into the dynamics of technological advancements and efficiency improvements, enabling them to formulate effective strategies for development that ensure long-term sustainability.