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Bridging the Barriers: Knowledge Connections, Productivity, and Capital Accumulation

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Author Info
R. Quentin Grafton
Tom Kompas
P. Dorian Owen

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Abstract

The paper explains the large differences in cross-country productivity performance by modeling and testing the effects of social barriers to communication on productivity and capital accumulation. In an optimal growth model, social barriers to communication that impede the formation of knowledge connections are shown to reduce both transitory and steady-state levels of total factor productivity (TFP), per capita consumption, and reproducible capital. A ‘bridging’ parameter in the growth model that lowers the disutility of forming knowledge connections generates testable and dynamic implications about the effects of social barriers on capital, consumption, and productivity. Extensive empirical testing of the theoretical propositions yields a robust and theoretically consistent result — linguistic barriers to communication reduce productivity and capital accumulation. The findings provide a theoretical justification and a robust explanation for cross-country differences in TFP, and fresh insights into how productivity ‘catch up’ may be initiated.

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Paper provided by International and Development Economics in its series International and Development Economics Working Papers with number idec04-5.

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Length: 42 pages
Date of creation: 2004
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Handle: RePEc:idc:wpaper:idec04-5

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Find related papers by JEL classification:
O41 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models
C61 - Mathematical and Quantitative Methods - - Mathematical Methods and Programming - - - Optimization Techniques; Programming Models; Dynamic Analysis
C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models

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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Knowles, Stephen, 2006. "Is Social Capital Part of the Institutions Continuum and is it a Deep Determinant of Development?," Working Papers RP2006/25, World Institute for Development Economic Research (UNU-WIDER). [Downloadable!]
  2. R. Grafton & Tom Kompas & P. Owen, 2007. "Bridging the barriers: knowledge connections, productivity and capital accumulation," Journal of Productivity Analysis, Springer, vol. 28(3), pages 219-231, December. [Downloadable!] (restricted)
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