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Productivity Differences

Author

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  • Acemoglu, Daron

    (Massachusetts Institute of Technology)

  • Zilibotti, Fabrizio

    (Institute for International Economic Studies, Stockholm University)

Abstract

Many technologies used by the LDCs are developed in the OECD economies, and as such, are used to make optimal use of the skills of these richer countries' workforces. Due to differences in the supply of skills, some of tasks performed by skilled workers in the OECD economies will be carried out by unskilled workers in the LDCs. Since the technologies in these tasks are designed to be used by skilled workers, productivity in the LDCs will be low. Even when all countries have equal access to new technologies, this mismatch between skills and technology can lead to sizeable differences in total factor productivity and output per worker. Our theory also suggests that productivity differences should be highest in medium-tech sectors, and that the trade regime and the degree of intellectual property right enforcement in the LDCs have an important effect on the direction of technical change and on productivity differences.

Suggested Citation

  • Acemoglu, Daron & Zilibotti, Fabrizio, 1998. "Productivity Differences," Seminar Papers 660, Stockholm University, Institute for International Economic Studies.
    • Handle: RePEc:hhs:iiessp:0660
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    More about this item

    Keywords

    Development; Directed Technical Change; Intellectual Property Rights; Skills; Technology; Total Factor Productivity;
    All these keywords.

    JEL classification:

    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
    • O34 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Intellectual Property and Intellectual Capital
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence

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