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Distance to Which Frontier? Evidence on Productivity Convergence from International Firm-level Data

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  • Bartelsman, Eric J
  • Haskel, Jonathan
  • Martin, Ralf

Abstract

An extensive literature on the convergence of productivity between countries examines whether productivity is pulled towards the global frontier country, perhaps due to learning and knowledge spillovers. More recently, studies within countries use the wide dispersion of productivity across firms to explore convergence to the national frontier. Given this within-country dispersion however between country-dispersion is hard to interpret, for it is quite possible that the best firms in a laggard average country are above at least some firms in a leading average country. This paper therefore uses micro data sets across many countries to build better measures of global and national frontiers and firms’ distance from them. Using UK data, we then find that (a) the national frontier exerts a stronger pull on domestic firms than does the global frontier and (b) the pull from the global frontier falls with technological distance, while the pull from the national frontier does not. This result suggests that firms might lag so far technologically that they cannot learn from the global frontier, while they still are able to benefit from domestic knowledge.

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Bibliographic Info

Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 7032.

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Date of creation: Nov 2008
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Handle: RePEc:cpr:ceprdp:7032

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Keywords: convergence; distance to frontier; productivity; spillovers;

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Cited by:
  1. repec:hal:cesptp:hal-00642680 is not listed on IDEAS
  2. Norman Gemmell & Richard Kneller & Danny McGowan & Ismael Sanz, . "Corporate Taxation and Productivity Catch-Up: Evidence from 11 European Countries," Discussion Papers 12/06, University of Nottingham, School of Economics.
  3. Priit Vahter, . "Does FDI spur innovation, productivity and knowledge sourcing by incumbent firms? Evidence from manufacturing industry in Estonia," Discussion Papers 10/09, University of Nottingham, GEP.
  4. J. David Brown & John Earle, 2011. "Nature Versus Nurture in the Origins of Highly Productive Businesses: An Exploratory Analysis of U.S. Manufacturing Establishments," Working Papers 11-26, Center for Economic Studies, U.S. Census Bureau.
  5. Ralf Martin, 2010. "Why is the USA so energy intensive? Evidence from US multinationals in the UK," Grantham Research Institute on Climate Change and the Environment Working Papers 15, Grantham Research Institute on Climate Change and the Environment.
  6. Simon Alder, 2010. "Competition and innovation: does the distance to the technology frontier matter?," IEW - Working Papers 493, Institute for Empirical Research in Economics - University of Zurich.
  7. Henry van der Wiel & Harold Creusen & George van Leeuwen & Eugene van der Pijll, 2008. "Cross your border and look around," DEGIT Conference Papers c013_005, DEGIT, Dynamics, Economic Growth, and International Trade.
  8. Ralf Martin, 2009. "Why is the US so energy intensive?: evidence from US multinationals in the UK," LSE Research Online Documents on Economics 28703, London School of Economics and Political Science, LSE Library.
  9. Fabling, Richard & Grimes, Arthur & Sanderson , Lynda & Stevens, Philip, 2008. "Some Rise by Sin, and Some by Virtue Fall: Firm Dynamics, Market Structure and Performance," Occasional Papers 08/1, Ministry of Economic Development, New Zealand.
  10. Chad Syverson, 2010. "What Determines Productivity?," NBER Working Papers 15712, National Bureau of Economic Research, Inc.
  11. YoungGak KIM & ITO Keiko, 2013. "R&D Investment and Productivity: A comparative study of Japanese and Korean firms," Discussion papers 13043, Research Institute of Economy, Trade and Industry (RIETI).
  12. Ralf Martin, 2010. "Why is the US so energy intensive?: evidence from US multinationals in the UK," LSE Research Online Documents on Economics 37675, London School of Economics and Political Science, LSE Library.

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