Impact of technological heterogeneity on economic efficiency and total factor productivity change in developed and developing G20 economies

Abstract

Introduction The G20 economies, comprising both developed and developing nations, exhibit significant economic efficiency and technological advancement disparities. Understanding these differences is critical for fostering sustainable growth, particularly optimizing resource utilization and narrowing technological gaps. Objectives This study evaluates economic efficiency, technological heterogeneity, and total factor productivity change (TFPC) among G20 economies from 1997 to 2022. It distinguishes between developed and developing nations to identify key challenges and opportunities for productivity enhancement. Methods We assess economic efficiency using Data Envelopment Analysis (DEA) with the Super-SBM model. Meta-Frontier Analysis measures technological disparities, while the Malmquist-Luenberger Productivity Index (MLI) decomposes TFPC into efficiency change (EC) and technological change (TC). Results The mean Meta-frontier efficiency score for G20 countries is 0.9556, indicating a 4.44% improvement potential. Developed economies (e.g., the U.S., Australia) exhibit optimal efficiency, whereas developing nations (e.g., Russia, China, India) lag due to slower technological integration. The Meta-Technology Ratio (MTR) reveals pronounced disparities, with developed economies scoring near 1, while emerging economies range between 0.8 and 0.9. Efficiency change (EC) drives productivity growth more substantially than technological change (TC). Conclusion Narrowing technological gaps, improving resource efficiency, and fostering innovation are vital for sustained economic development, particularly in emerging G20 economies. Policy recommendations include prioritizing R&D investments, technological advancement, and international collaboration to promote equitable and sustainable growth.