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Evaluating policies to improve total factor productivity in four large Latin American countries

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  • Aravena, Claudio
  • Hofman, André A.
  • Fernández de Guevara, Juan
  • Mas, Matilde

Abstract

This paper develops a framework to analyze the potential of different variables to increase total factor productivity (TFP) growth in countries with poor productivity performance. It takes an industry level approach for a set of countries used as a benchmark. The information comes from the EU KLEMS and LA KLEMS databases. Once this influence is measured, the difference in the scores of each variable in four Latin American countries (Argentina, Brazil, Chile and Mexico) with respect to the benchmark is used to test their potential for increasing productivity growth. Results show that, the top priorities for these four countries are to improve the labour market, to reduce the share of self-employed people and to modernize the functioning of their economic systems. Our results also indicate that the intensification of investment in ICT and R&D activities is a key instrument for promoting growth. Public policies should also aim to encourage a higher endowment of Internet infrastructures and their use.

Suggested Citation

  • Aravena, Claudio & Hofman, André A. & Fernández de Guevara, Juan & Mas, Matilde, 2014. "Evaluating policies to improve total factor productivity in four large Latin American countries," Macroeconomía del Desarrollo 36839, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).
    • Handle: RePEc:ecr:col037:36839
    Note: Includes bibliography.
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    1. Rachel Griffith & Stephen Redding & John Van Reenen, 2004. "Mapping the Two Faces of R&D: Productivity Growth in a Panel of OECD Industries," The Review of Economics and Statistics, MIT Press, vol. 86(4), pages 883-895, November.
    2. Anita Wölfl & Isabelle Wanner & Tomasz Koźluk & Giuseppe Nicoletti, 2009. "Ten Years of Product Market Reform in OECD Countries: Insights from a Revised PMR Indicator," OECD Economics Department Working Papers 695, OECD Publishing.
    3. Timmer,Marcel P. & Inklaar,Robert & O'Mahony,Mary & Ark,Bart van, 2013. "Economic Growth in Europe," Cambridge Books, Cambridge University Press, number 9781107412446.
    4. Christian Dahl & Hans Kongsted & Anders Sørensen, 2011. "ICT and productivity growth in the 1990s: panel data evidence on Europe," Empirical Economics, Springer, vol. 40(1), pages 141-164, February.
    5. Matilde Mas & Robert Stehrer (ed.), 2012. "Industrial Productivity in Europe," Books, Edward Elgar Publishing, number 14369.
    6. Cameron, Gavin & Proudman, James & Redding, Stephen, 2005. "Technological convergence, R&D, trade and productivity growth," European Economic Review, Elsevier, vol. 49(3), pages 775-807, April.
    7. Giuseppe Nicoletti & Stefano Scarpetta, 2003. "Regulation, productivity and growth: OECD evidence [‘A model of growth through creative destruction’]," Economic Policy, CEPR, CESifo, Sciences Po;CES;MSH, vol. 18(36), pages 9-72.
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    Cited by:

    1. Aravena, Claudio & Fernández de Guevara, Juan & Hofman, André A. & Mas, Matilde, 2014. "Structural change in four Latin American countries: An international perspective," Macroeconomía del Desarrollo 36851, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).
    2. Phillip Akanni Olomola & Tolulope Temilola Osinubi, 2018. "Determinants of Total Factor Productivity in Mexico, Indonesia, Nigeria, and Turkey (1980–2014)," Emerging Economy Studies, International Management Institute, vol. 4(2), pages 192-217, November.

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