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Technological Change, Technological Catch-Up, and Capital Deepening: Relative Contributions to Growth and Convergence

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Author Info
Subodh Kumar
R. Robert Russell
Abstract

We decompose labor-productivity growth into components attributable to (1) technological change (shifts in the world production frontier), (2) technological catch-up (movements toward or away from the frontier), and (3) capital accumulation (movement along the frontier). The world production frontier is constructed using deterministic methods requiring no specification of functional form for the technology nor any assumption about market structure or the absence of market imperfections. We analyze the evolution of the cross-country distribution of labor productivity in terms of the tripartite decomposition, finding that technological change is decidedly nonneutral and that both growth and bipolar international divergence are driven primarily by capital deepening.

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Article provided by American Economic Association in its journal American Economic Review.

Volume (Year): 92 (2002)
Issue (Month): 3 (June)
Pages: 527-548
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Handle: RePEc:aea:aecrev:v:92:y:2002:i:3:p:527-548

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Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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  2. Léopold Simar, Paul W. Wilson, 2000. "A general methodology for bootstrapping in non-parametric frontier models," Journal of Applied Statistics, Taylor and Francis Journals, vol. 27(6), pages 779-802, August. [Downloadable!] (restricted)
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  3. Qi Li, 1996. "Nonparametric testing of closeness between two unknown distribution functions," Econometric Reviews, Taylor and Francis Journals, vol. 15(3), pages 261-274. [Downloadable!] (restricted)
  4. Galor, Oded, 1996. "Convergence? Inferences from Theoretical Models," Economic Journal, Royal Economic Society, vol. 106(437), pages 1056-69, July. [Downloadable!] (restricted)
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  5. Robert E. Hall & Charles I. Jones, 1999. "Why Do Some Countries Produce So Much More Output per Worker than Others?," NBER Working Papers 6564, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  6. Quah, Danny, 1993. "Galton's Fallacy and Tests of the Convergence Hypothesis," CEPR Discussion Papers 820, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
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  7. Kneip, Alois & Park, Byeong U. & Simar, L opold, 1998. "A Note On The Convergence Of Nonparametric Dea Estimators For Production Efficiency Scores," Econometric Theory, Cambridge University Press, vol. 14(06), pages 783-793, December. [Downloadable!]
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  15. Mankiw, N Gregory & Romer, David & Weil, David N, 1992. "A Contribution to the Empirics of Economic Growth," The Quarterly Journal of Economics, MIT Press, vol. 107(2), pages 407-37, May. [Downloadable!] (restricted)
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  16. Charnes, A. & Cooper, W. W. & Rhodes, E., 1978. "Measuring the efficiency of decision making units," European Journal of Operational Research, Elsevier, vol. 2(6), pages 429-444, November. [Downloadable!] (restricted)
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  18. Young, Alwyn, 1995. "The Tyranny of Numbers: Confronting the Statistical Realities of the East Asian Growth Experience," The Quarterly Journal of Economics, MIT Press, vol. 110(3), pages 641-80, August. [Downloadable!] (restricted)
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. R. Robert Russell & William Schworm, 2007. "Axiomatic Foundations of Efficiency Measurement on Data-Generated Technologies," Discussion Papers 2007-35, School of Economics, The University of New South Wales. [Downloadable!]
  2. Alfons Palangkaraya & Jongsay Yong, 2007. "Exporter and Non-Exporter Productivity Differentials: Evidence from Australian Manufacturing Establishments," Melbourne Institute Working Paper Series wp2007n04, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne. [Downloadable!]
  3. Altug, Sumru G. & Filiztekin, Alpay & Pamuk, Sevket, 2007. "The Sources of Long-term Economic Growth for Turkey, 1880-2005," CEPR Discussion Papers 6463, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
  4. Vincent M. Otto & Timo Kuosmanen & Ekko C. van Ierland, 2006. "Estimating Feedback Effect in Technical Change: A Frontier Approach," Working Papers 2006.27, Fondazione Eni Enrico Mattei. [Downloadable!]
  5. Oleg Badunenko & Daniel J. Henderson & Valentin Zelenyuk, 2007. "Technological Change and Transition : Relative Contributions to Worldwide Growth during the 1990s," Discussion Papers of DIW Berlin 740, DIW Berlin, German Institute for Economic Research. [Downloadable!]
  6. Carlo Altomonte & Italo Colantone, 2005. "Firm Heterogeneity and Endogenous Regional Disparities," LICOS Discussion Papers 16105, LICOS - Centre for Institutions and Economic Performance, K.U.Leuven. [Downloadable!]
  7. Eiji Yamamura & Inyong Shin, 2007. "Technological Change and Catch-up and Capital Deepening: Relative Contributions to Growth and Convergence: Comment," Economics Bulletin, Economics Bulletin, vol. 15(3), pages 1-8. [Downloadable!]
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