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Bridging the barriers: knowledge connections, productivity and capital accumulation

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  • R. Grafton

    ()

  • Tom Kompas

    ()

  • P. Owen

    ()

Abstract

The paper explains the large differences in cross-country productivity performance by modeling and testing the effects of social barriers to communication on productivity and capital accumulation. In an optimal growth model, social barriers to communication that impede the formation of knowledge connections are shown to reduce both transitory and steady-state levels of total factor productivity (TFP), per capita consumption, and reproducible capital. A ‘bridging’ parameter in the growth model that lowers the disutility of forming knowledge connections generates testable and dynamic implications about the effects of social barriers on capital, consumption, and productivity. Extensive empirical testing of the theoretical propositions yields a robust and theoretically consistent result — linguistic barriers to communication reduce productivity and capital accumulation. The findings provide a theoretical justification and a robust explanation for cross-country differences in TFP, and fresh insights into how productivity ‘catch up’ may be initiated.

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Bibliographic Info

Article provided by Springer in its journal Journal of Productivity Analysis.

Volume (Year): 28 (2007)
Issue (Month): 3 (December)
Pages: 219-231

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Handle: RePEc:kap:jproda:v:28:y:2007:i:3:p:219-231

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Web page: http://www.springerlink.com/link.asp?id=100296

Related research

Keywords: Knowledge connections; Productivity; Economic growth; O41; C61; C21;

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Citations

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Cited by:
  1. Tran, Thi Bich & Grafton, R. Quentin & Kompas, Tom, 2009. "Institutions matter: The case of Vietnam," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 38(1), pages 1-12, January.
  2. Helena Soares & Tiago Neves Sequeira & Pedro Macias Marques & Orlando Gomes & Alexandra Ferreira-Lopes, 2012. "Social Infrastructure and the Preservation of Physical Capital: Equilibria and Transitional Dynamics," Working Papers Series 2 12-04, ISCTE-IUL, Business Research Unit (BRU-IUL).
  3. Bob Baulch & Hoa Thi Minh Nguyen & Hung Thai Pham & Phuong Thu Thi Phuong, 2011. "Ethnic Minority Poverty in Vietnam," Working Papers id:3426, eSocialSciences.
  4. R. Grafton & Tom Kompas & P. Owen, 2007. "Bridging the barriers: knowledge connections, productivity and capital accumulation," Journal of Productivity Analysis, Springer, vol. 28(3), pages 219-231, December.
  5. Ratna, Nazmun N. & Quentin Grafton, R. & Kompas, Tom, 2009. "Is diversity bad for economic growth?: Evidence from state-level data in the US," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 38(6), pages 859-870, December.
  6. Knowles, Stephen, 2006. "Is Social Capital Part of the Institutions Continuum and is it a Deep Determinant of Development?," Working Paper Series RP2006/25, World Institute for Development Economic Research (UNU-WIDER).

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