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Productivity convergence at the disaggregate levels

Author

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  • Xiaoyu Wu

    (Ramapo College of New Jersey)

Abstract

Using recently developed industry-specific purchasing power parities (PPPs), we test for β-convergence and σ-convergence of labor productivity at one-digit and two-digit industrial levels for 17 OECD countries. We confirm that the principal finding of Bernard and Jones (1996)—that total manufacturing shows little evidence of productivity convergence among OECD countries—is in fact supported by the data, even though their approach is flawed by the use of aggregate rather than industry-specific PPPs. However, we find that many two-digit manufacturing industries do converge. All one-digit sectors except manufacturing exhibit strong convergence trends. Convergence also occurs in all services industries except post and telecommunications. Respective contributions of industrial productivity growth and across-industry labor shifts to trends at the next aggregate level are also analyzed.

Suggested Citation

  • Xiaoyu Wu, 2009. "Productivity convergence at the disaggregate levels," Economics Bulletin, AccessEcon, vol. 29(4), pages 2505-2516.
    • Handle: RePEc:ebl:ecbull:eb-09-00403
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    More about this item

    Keywords

    labor productivity; industry-specific PPPs; β-convergence; σ-convergence;
    All these keywords.

    JEL classification:

    • O4 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity

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