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Sectoral Productivity Trends:Convergence Islands in Oceans of Divergence

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Author Info

  • Vries, Gaaitzen J. de
  • Los, Bart
  • Castellacci, Fulvio

    (Groningen University)

Abstract

In their influential study on productivity growth at the sector-level, Bernard and Jones (1996, BJ) observed convergence of aggregate labor productivity levels in 14 highly developed countries in 1970-1987. They also found evidence that this could be attributed to convergence in services productivity rather than in manufacturing. The main question this paper addresses is whether this result can be generalized to a broader set of countries. Several strands of growth theory suggest that thresholds with regard to a variety of issues can lead to multiple growth regimes, which are likely to lead to very heterogeneous patterns of convergence and divergence. To analyze this, we use econometric techniques that explicitly allow for identification of parameter heterogeneity (quantile regressions and quantile smoothing splines), both with regard to initial conditions and to performance conditional on these initial productivity levels. BJ?s data are extended in several dimensions. The recently developed sectoral dataset we use spans the period 1970-2004 and covers 49 countries, including many developing countries. Overall, our findings suggest that convergence as found by BJ only applies to limited groups of country-sectors (?convergence islands?), whereas the biggest parts of our sample spaces can be considered as ?oceans of divergence?.

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File URL: http://irs.ub.rug.nl/ppn/327955589
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Bibliographic Info

Paper provided by Groningen Growth and Development Centre, University of Groningen in its series GGDC Research Memorandum with number GD-118.

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Date of creation: 2010
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Handle: RePEc:dgr:rugggd:gd-118

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Cited by:
  1. Dijk, Michiel van, 2013. "Productivity growth at the sectoral level: measurement and projections," Proceedings Issues, 2013: Productivity and Its Impacts on Global Trade, June 2-4, 2013. Seville, Spain 152269, International Agricultural Trade Research Consortium.
  2. Marine Hadengue & Thierry Warin, 2013. "Patterns of Specialization and (Un)conditional Convergence: The Cases of Brazil, China and India," CIRANO Working Papers 2013s-17, CIRANO.
  3. Alison Stegman, 2011. "Sectoral Productivity, Structural Change and Convergence," CAMA Working Papers 2011-32, Centre for Applied Macroeconomic Analysis, Crawford School of Public Policy, The Australian National University.

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