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International productivity and factor price comparisons

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  • Marshall, Kathryn G.
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    Abstract

    Using OECD input–output tables for a diverse group of 33 countries in the year 2000 and estimates of each country's factor stocks, I compute factor payments for aggregate labor and capital with value-added data adjusted for self-employment by sector. Using a detailed technology matrix for the U.S., I compute factor-specific productivity measures in each country relative to the U.S., and show that these measures are strongly correlated with the pattern of wages and rental rates. I find that many low income countries with low labor productivity have relatively high capital productivity. I also find a distinctive pattern between factor productivity and factor payments depending on whether a country has a high or low wage-rental ratio compared to the U.S. I show these findings are consistent with the existence of sector-based differences in production technology and complementarities between factors.

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    Bibliographic Info

    Article provided by Elsevier in its journal Journal of International Economics.

    Volume (Year): 87 (2012)
    Issue (Month): 2 ()
    Pages: 386-390

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    Handle: RePEc:eee:inecon:v:87:y:2012:i:2:p:386-390

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    Web page: http://www.elsevier.com/locate/inca/505552

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    Keywords: Factor-specific productivity; TFP differences; Factor payments;

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    References

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    1. Fadinger, Harald, 2011. "Productivity differences in an interdependent world," Journal of International Economics, Elsevier, vol. 84(2), pages 221-232, July.
    2. Keith E. Maskus & Shuichiro Nishioka, 2009. "Development-related biases in factor productivities and the HOV model of trade," Canadian Journal of Economics, Canadian Economics Association, vol. 42(2), pages 519-553, May.
    3. Caves, Douglas W & Christensen, Laurits R & Diewert, W Erwin, 1982. "Multilateral Comparisons of Output, Input, and Productivity Using Superlative Index Numbers," Economic Journal, Royal Economic Society, vol. 92(365), pages 73-86, March.
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    11. Lewis, William W., 2004. "The Power of Productivity," University of Chicago Press Economics Books, University of Chicago Press, edition 1, number 9780226476766, June.
    12. Daniel Trefler & Susan Chun Zhu, 2005. "The Structure of Factor Content Predictions," NBER Working Papers 11221, National Bureau of Economic Research, Inc.
    13. Douglas Gollin, 2001. "Getting Income Shares Right," Department of Economics Working Papers 2001-11, Department of Economics, Williams College.
    14. Chang-Tai Hsieh & Peter J. Klenow, 2010. "Development Accounting," American Economic Journal: Macroeconomics, American Economic Association, vol. 2(1), pages 207-23, January.
    15. Trefler, Daniel, 1993. "International Factor Price Differences: Leontief Was Right!," Journal of Political Economy, University of Chicago Press, vol. 101(6), pages 961-87, December.
    16. Trefler, Daniel, 1995. "The Case of the Missing Trade and Other Mysteries," American Economic Review, American Economic Association, vol. 85(5), pages 1029-46, December.
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