Kaldor-Verdoorn's Law and Increasing Returns to Scale: A Comparison Across Developed Countries
AbstractThe objective of this study is to investigate the validity of the Kaldor-Verdoorn’s Law in explaining the long run determinants of the labor productivity growth for the manufacturing sector of some developed economies (Western European Countries, Australia, Canada, Japan and United States). We consider the period 1973-2006 using data provided by the European Commission - Economics and Financial Affairs. Our findings suggest that the law is valid for the manufacturing as countries show increasing returns to scale. Capital growth and labor cost growth do not appear important in explaining productivity growth. The estimated Verdoorn coefficients are found to be substantially stable throughout the period.
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Bibliographic InfoPaper provided by Fondazione Eni Enrico Mattei in its series Working Papers with number 2012.92.
Date of creation: Dec 2012
Date of revision:
Increasing Returns; Kaldor-Verdoorn Law; Productivity Growth; Manufacturing Sector;
Other versions of this item:
- Emanuele Millemaci & Ferdinando Ofria, 2014. "Kaldor-Verdoorn's law and increasing returns to scale: A comparison across developed countries," Journal of Economic Studies, Emerald Group Publishing, vol. 41(1), pages 140 - 162, January.
- Ofria, Ferdinando & Millemaci, Emanuele, 2010. "Kaldor-Verdoorn’s law and increasing returns to scale: a comparison across developed countries," MPRA Paper 30941, University Library of Munich, Germany.
- C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
- O47 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Measurement of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
- O57 - Economic Development, Technological Change, and Growth - - Economywide Country Studies - - - Comparative Studies of Countries
This paper has been announced in the following NEP Reports:
- NEP-ALL-2013-01-26 (All new papers)
- NEP-EEC-2013-01-26 (European Economics)
- NEP-EFF-2013-01-26 (Efficiency & Productivity)
- NEP-PKE-2013-01-26 (Post Keynesian Economics)
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