Portuguese economic growth revisited: a technology-gap explanation

After a period of convergence where many perceived the country as a success case, Portugal’s economic performance proved to be disappointing in the last decade. In this study we focus on the relationship between technology and economic catching-up in order to answer to two major questions: (i) Has the technological structure of the Portuguese economy been an obstacle for catching up? (ii) What was the role played by the inefficient use of the available resources? Using Data Envelopment Analysis (DEA), we show that over the last few decades the efficiency level of Portugal relative to a sample of 19 OECD countries fell sharply, which resulted in a divergent pattern of the Portuguese economy relative to the technological frontier.