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International TFP Dynamics and Human Capital Stocks: a Panel Data Analysis, 1960-2003

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Author Info
Adriana Di Liberto ()
Francesco Pigliaru ()
P. Chelucci

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Abstract

This paper adopts a fixed-effect panel methodology that enables us to take into account both TFP and neoclassical convergence. We use a sample of 76 countries, 1960-2003 and estimate TFP values obtained by using different estimators such as LSDV, Kiviet-corrected LSDV, and GMM à la Arellano and Bond. In our estimates, cross-country TFP dynamics shows that most countries in the sample do not catch up with the USA. We also find conditional convergence in TFP levels and that human capital acts as a robust enhancing factor of technology adoption, as suggested by Nelson and Phelps in 1966. In contrast with previous evidence, in our results even very low level of human capital stocks allow a country to enter a “conditional TFP convergence club” – a result again consistent with the original version of the Nelson-Phelps hypothesis. Further, our results imply a plausible link between stages of development and returns to different levels of education. Finally, the positive influence of human capital on technology catch up is robust to the inclusion of controls for a country’s institutional quality.

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Paper provided by Centre for North South Economic Research, University of Cagliari and Sassari, Sardinia in its series Working Paper CRENoS with number 200812.

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Date of creation: 2008
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Handle: RePEc:cns:cnscwp:200812

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Related research
Keywords: TFP; catching up; panel data; human capital;

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Find related papers by JEL classification:
O33 - Economic Development, Technological Change, and Growth - - Technological Change - - - Technological Change: Choices and Consequences; Diffusion Processes
C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data
O47 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Measurement of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence

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