What explains the total factor productivity gap between OECD economies and the U.S.

Since 2000, the total factor productivity (TFP) in most of the OECD economies relative to the United States has been declining. This article develops an empirical model to study the linkages between relative differences in TFP gap and relative differences in fundamental factors (factor gaps). Using panel data for 33 OECD countries, it finds that the machinery and equipment investment gap, the gap in information and communication technology penetration related to mobile phone subscriptions, the economic globalization gap and the institutional quality gap explain significantly the TFP gap between the OECD economies and the United States during 2000--2011.