IDEAS home Printed from https://ideas.repec.org/a/eaa/aeinde/v14y2014i1_13.html
   My bibliography  Save this article

The evolution and contribution of technological progress to the South African economy: Growth accounting and Kalman filter application

Author

Listed:
  • Roula INGLESI-LOTZ
  • Renee VAN EYDEN
  • Charlotte DU TOIT

Abstract

This study examines the importance of technological progress to aggregate economic growth in South Africa. Quantifying the contribution of technological progress to economic growth has become imperative, considering the outcome of a simple growth accounting exercise. The findings of this exercise indicate that the contribution of technological growth to aggregate economic growth increased substantially, over the past three decades. Economic growth is modelled through a Cobb-Douglas production function, employing Kalman filter to determine the evolution of the Solow residual over time. The Solow residual represents both technological progress and structural change. According to the Kalman filter results, technological progress is characterised by an upward trend since the 1980s with a steeper slope during the 2000s. Our results show that technological progress has become a factor as important to production as capital stock and labour; fact that policy makers should take into consideration to boost economic growth.

Suggested Citation

  • Roula INGLESI-LOTZ & Renee VAN EYDEN & Charlotte DU TOIT, 2014. "The evolution and contribution of technological progress to the South African economy: Growth accounting and Kalman filter application," Applied Econometrics and International Development, Euro-American Association of Economic Development, vol. 14(1), pages 175-188.
    • Handle: RePEc:eaa:aeinde:v:14:y:2014:i:1_13
    as

    Download full text from publisher

    File URL: http://www.usc.es/economet/reviews/aeid14113.pdf
    Download Restriction: No.
    ---><---

    References listed on IDEAS

    as
    1. Barro, Robert J, 1999. "Notes on Growth Accounting," Journal of Economic Growth, Springer, vol. 4(2), pages 119-137, June.
    2. Layard, Richard & Nickell, Stephen & Jackman, Richard, 2005. "Unemployment: Macroeconomic Performance and the Labour Market," OUP Catalogue, Oxford University Press, number 9780199279173, Decembrie.
    3. Hossain, A., 2006. "Sources of Economic Growth in Indonesia, 1966-2003," Applied Econometrics and International Development, Euro-American Association of Economic Development, vol. 6(2).
    4. Loening, J.L., 2004. "Human Capital, Technology diffusion and Economic Growth in Low-to-Middle Income Country: a time series perspective of Guatemala, 1950-2001," Applied Econometrics and International Development, Euro-American Association of Economic Development, vol. 4(3).
    5. Cuthbertson, Keith, 1988. "Expectations, Learning and the Kalman Filter," The Manchester School of Economic & Social Studies, University of Manchester, vol. 56(3), pages 223-246, September.
    6. Hamilton, James D, 1985. "Uncovering Financial Market Expectations of Inflation," Journal of Political Economy, University of Chicago Press, vol. 93(6), pages 1224-1241, December.
    7. Robert M. Solow, 1956. "A Contribution to the Theory of Economic Growth," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 70(1), pages 65-94.
    8. Robert M. Solow, 1955. "The Production function and the Theory of Capital," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 23(2), pages 101-108.
    9. SINHA, Dipendra, 2008. "Patents, Innovations And Economic Growth In Japan And South Korea: Evidence From Individual Country And Panel Data," Applied Econometrics and International Development, Euro-American Association of Economic Development, vol. 8(1), pages 181-188.
    10. T. W. Swan, 1956. "ECONOMIC GROWTH and CAPITAL ACCUMULATION," The Economic Record, The Economic Society of Australia, vol. 32(2), pages 334-361, November.
    11. Perron, Pierre, 1989. "The Great Crash, the Oil Price Shock, and the Unit Root Hypothesis," Econometrica, Econometric Society, vol. 57(6), pages 1361-1401, November.
    12. David Cass, 1965. "Optimum Growth in an Aggregative Model of Capital Accumulation," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 32(3), pages 233-240.
    13. Johannes Fedderke & Raphael de Kadt & John Luiz, 2003. "Capstone or deadweight? Inefficiency, duplication and inequity in South Africa's tertiary education system, 1910--93," Cambridge Journal of Economics, Oxford University Press, vol. 27(3), pages 377-400, May.
    14. T. Lawson, 1980. "Adaptive Expectations and Uncertainty," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 47(2), pages 305-320.
    15. Robert E. Hall & Charles I. Jones, "undated". "The Productivity of Nations," Working Papers 96012, Stanford University, Department of Economics.
    16. Pahlavani, M., 2005. "Sources Of Economic Growth In Iran: A Cointegration Analysis In The Presence Of Structural Breaks, 1960-2003," Applied Econometrics and International Development, Euro-American Association of Economic Development, vol. 5(4).
    17. Dolado, Juan J & Jenkinson, Tim & Sosvilla-Rivero, Simon, 1990. "Cointegration and Unit Roots," Journal of Economic Surveys, Wiley Blackwell, vol. 4(3), pages 249-273.
    18. K. J. Arrow, 1971. "The Economic Implications of Learning by Doing," Palgrave Macmillan Books, in: F. H. Hahn (ed.), Readings in the Theory of Growth, chapter 11, pages 131-149, Palgrave Macmillan.
    19. Maria del Mar Salinas Jiménez, 2003. "Efficiency and TFP Growth in the Spanish Regions: The Role of Human and Public Capital," Growth and Change, Wiley Blackwell, vol. 34(2), pages 157-174, June.
    20. JW Fedderke, 2002. "The Structure of Growth in the South African Economy: Factor Accumulation and Total Factor Productivity Growth 1970‐97*(1)," South African Journal of Economics, Economic Society of South Africa, vol. 70(4), pages 282-299, March.
    21. Stan Du Plessis & Ben Smit, 2007. "South Africa's Growth Revival After 1994," Journal of African Economies, Centre for the Study of African Economies, vol. 16(5), pages 668-704, November.
    22. Taegeun Byun & Kabsung Kim & Hyejin Choi, 2012. "Comparative Analysis of the Total Factor Productivity of Manufacturing in Northeast Asian Metropolitan Areas," Growth and Change, Wiley Blackwell, vol. 43(1), pages 167-177, March.
    23. Kris IYER, 2011. "Technology Gap, Catching-up and Outward Orientation: Analysis of 63 countries," Applied Econometrics and International Development, Euro-American Association of Economic Development, vol. 11(2).
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Elena Popkova & Oksana Chechina & Aleksandra Sultanova, 2016. "Structural and Logical Model of Contemporary Global Economic System," European Research Studies Journal, European Research Studies Journal, vol. 0(2), pages 218-227.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Dakpogan, Arnaud & Smit, Eon, 2018. "The effect of electricity losses on GDP in Benin," MPRA Paper 89545, University Library of Munich, Germany.
    2. Xavier Sala-i-Martin, 1990. "Lecture Notes on Economic Growth(I): Introduction to the Literature and Neoclassical Models," NBER Working Papers 3563, National Bureau of Economic Research, Inc.
    3. repec:ebl:ecbull:v:2:y:2002:i:1:p:1-15 is not listed on IDEAS
    4. Fedderke, J.W. & Bogetic, Z., 2009. "Infrastructure and Growth in South Africa: Direct and Indirect Productivity Impacts of 19 Infrastructure Measures," World Development, Elsevier, vol. 37(9), pages 1522-1539, September.
    5. Fedderke, Johannes W., 2018. "Exploring unbalanced growth: Understanding the sectoral structure of the South African economy," Economic Modelling, Elsevier, vol. 72(C), pages 177-189.
    6. Lecocq, Franck & Shalizi, Zmarak, 2007. "How might climate change affect economic growth in developing countries ? a review of the growth literature with a climate lens," Policy Research Working Paper Series 4315, The World Bank.
    7. Johannes W. Fedderke & Yang Liu, 2017. "Schumpeterian and semi-endogenous productivity growth explanations," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 25(1), pages 111-137, January.
    8. Binlei Gong, 2020. "New Growth Accounting," American Journal of Agricultural Economics, John Wiley & Sons, vol. 102(2), pages 641-661, March.
    9. Frédéric Lordon, 1991. "Théorie de la croissance : quelques développements récents [Deuxième partie : la redécouverte des rendements croissants]," Revue de l'OFCE, Programme National Persée, vol. 37(1), pages 191-243.
    10. Aykut Kibritçioglu, 2002. "On the Smithian origins of "new" trade and growth theories," Economics Bulletin, AccessEcon, vol. 2(1), pages 1-15.
    11. Roberto Ezcurra, 2001. "Convergencia Y Cambio Estructural En La Unión Europea," Documentos de Trabajo - Lan Gaiak Departamento de Economía - Universidad Pública de Navarra 0111, Departamento de Economía - Universidad Pública de Navarra.
    12. Voosholz, Frauke, 2014. "A survey on modeling economic growth. With special interest on natural resource use," CAWM Discussion Papers 69, University of Münster, Münster Center for Economic Policy (MEP).
    13. Lau, Sau-Him Paul & Sin, Chor-Yiu, 1997. "Observational equivalence and a stochastic cointegration test of the neoclassical and Romer's increasing returns models," Economic Modelling, Elsevier, vol. 14(1), pages 39-60, January.
    14. Jesus Felipe & John S.L. McCombie, 2013. "The Aggregate Production Function and the Measurement of Technical Change," Books, Edward Elgar Publishing, number 1975.
    15. Ana Paula MARTINS, 2016. "Wealth-In-Utility and Time-Consistent Growth: Real Excursions with an “Overlapping” Welfare Function," Turkish Economic Review, KSP Journals, vol. 3(1), pages 54-81, March.
    16. Justin Yifu Lin & Pengfei Zhang, 2007. "Development Strategy, Optimal Industrial Structure and Economic Growth in Less Developed Countries," Development Economics Working Papers 22710, East Asian Bureau of Economic Research.
    17. Robert J. Barro, 2013. "Health and Economic Growth," Annals of Economics and Finance, Society for AEF, vol. 14(2), pages 329-366, November.
    18. Minea, Alexandru, 2008. "The Role of Public Spending in the Growth Theory Evolution," Journal for Economic Forecasting, Institute for Economic Forecasting, vol. 5(2), pages 99-120, June.
    19. Alessandro Bellocchi & Giuseppe Travaglini & Beatrice Vitali, 2023. "How capital intensity affects technical progress: An empirical analysis for 17 advanced economies," Metroeconomica, Wiley Blackwell, vol. 74(3), pages 606-631, July.
    20. Robert M. Solow, 2000. "The neoclassical theory of growth and distribution," BNL Quarterly Review, Banca Nazionale del Lavoro, vol. 53(215), pages 349-381.
    21. Lau, Sau-Him Paul, 1997. "Using stochastic growth models to understand unit roots and breaking trends," Journal of Economic Dynamics and Control, Elsevier, vol. 21(10), pages 1645-1667, August.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eaa:aeinde:v:14:y:2014:i:1_13. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: M. Carmen Guisan (email available below). General contact details of provider: http://www.usc.es/economet/eaa.htm .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.