IDEAS home Printed from https://ideas.repec.org/p/ost/wpaper/307.html
   My bibliography  Save this paper

Converging Wages, Diverging GRP: Directed Technical Change and Endogenous Growth. Empirical Analysis of Growth Patterns across Kazakh regions

Author

Listed:
  • Alisher Aldashev

    (Osteuropa-Institut, Regensburg (Institut for East European Studies))

Abstract

The paper analyzes unequal regional development in Kazakhstan. Applying the nonlinear least squares method in presence of spatial correlation we estimate the convergence rate of wages across Kazakh regions for the period 2003–2009. The estimated convergence rate is about 3% which is somewhat higher than estimates obtained for the USA and Europe. At the same time there is slight divergence in the GRP per capita. It is argued that convergence in wages which coincides with divergence in the per capita GRP is consistent with the endogenous growth model where profit maximizing firms choose the capital intensity of the technology. This implies that the inequality between regions will only exacerbate and the central government may wish to invest more in low-growth regions to alleviate disproportional development.

Suggested Citation

  • Alisher Aldashev, 2011. "Converging Wages, Diverging GRP: Directed Technical Change and Endogenous Growth. Empirical Analysis of Growth Patterns across Kazakh regions," Working Papers 307, Leibniz Institut für Ost- und Südosteuropaforschung (Institute for East and Southeast European Studies).
    • Handle: RePEc:ost:wpaper:307
    as

    Download full text from publisher

    File URL: http://www.oei-dokumente.de/publikationen/wp/wp-307.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Dollar, David & Kraay, Aart, 2002. "Growth Is Good for the Poor," Journal of Economic Growth, Springer, vol. 7(3), pages 195-225, September.
    2. Barro, Robert J & Sala-i-Martin, Xavier, 1992. "Convergence," Journal of Political Economy, University of Chicago Press, vol. 100(2), pages 223-251, April.
      • Barro, R.J. & Sala-I-Martin, X., 1991. "Convergence," Papers 645, Yale - Economic Growth Center.
      • Barro, Robert J. & Sala-i-Martin, Xavier, 1992. "Convergence," Scholarly Articles 3451299, Harvard University Department of Economics.
    3. Robert M. Solow, 1956. "A Contribution to the Theory of Economic Growth," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 70(1), pages 65-94.
    4. King, Robert G & Rebelo, Sergio T, 1993. "Transitional Dynamics and Economic Growth in the Neoclassical Model," American Economic Review, American Economic Association, vol. 83(4), pages 908-931, September.
    5. N. Gregory Mankiw & David Romer & David N. Weil, 1992. "A Contribution to the Empirics of Economic Growth," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 107(2), pages 407-437.
    6. John C. Driscoll & Aart C. Kraay, 1998. "Consistent Covariance Matrix Estimation With Spatially Dependent Panel Data," The Review of Economics and Statistics, MIT Press, vol. 80(4), pages 549-560, November.
    7. Robert J. Barro & Xavier Sala-i-Martin, 1991. "Convergence across States and Regions," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 22(1), pages 107-182.
    8. Peter Huber, 2007. "Regional Labour Market Developments in Transition: A Survey of the Empirical Literature," European Journal of Comparative Economics, Cattaneo University (LIUC), vol. 4(2), pages 263-298, September.
    9. Hernando Zuleta, 2008. "Factor Saving Innovations and Factor Income Shares," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 11(4), pages 836-851, October.
    10. repec:zbw:bofitp:2003_009 is not listed on IDEAS
    11. Robert J. Barro & Xavier Sala-i-Martin, 1990. "Economic Growth and Convergence across The United States," NBER Working Papers 3419, National Bureau of Economic Research, Inc.
    12. Daniel Hoechle, 2007. "Robust standard errors for panel regressions with cross-sectional dependence," Stata Journal, StataCorp LP, vol. 7(3), pages 281-312, September.
    13. Enrico Marelli & Marcello Signorelli, 2010. "Transition, Regional Features, Growth and Labour Market Dynamics," AIEL Series in Labour Economics, in: Floro Ernesto Caroleo & Francesco Pastore (ed.), The Labour Market Impact of the EU Enlargement. A New Regional Geography of Europe?, edition 1, chapter 5, pages 99-147, AIEL - Associazione Italiana Economisti del Lavoro.
    14. Floro Ernesto Caroleo & Francesco Pastore (ed.), 2010. "The Labour Market Impact of the EU Enlargement," AIEL Series in Labour Economics, Springer, number 978-3-7908-2164-2, February.
    15. Davidson, Russell & MacKinnon, James G., 1993. "Estimation and Inference in Econometrics," OUP Catalogue, Oxford University Press, number 9780195060119, Decembrie.
    16. Floro Ernesto Caroleo & Francesco Pastore (ed.), 2010. "The Labour Market Impact of the EU Enlargement. A New Regional Geography of Europe?," AIEL Series in Labour Economics, AIEL - Associazione Italiana Economisti del Lavoro, number 04, November.
    17. Laura Solanko, 2003. "An empirical note on growth and convergence across Russian regions," Macroeconomics 0308005, University Library of Munich, Germany.
    18. Newey, Whitney & West, Kenneth, 2014. "A simple, positive semi-definite, heteroscedasticity and autocorrelation consistent covariance matrix," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 33(1), pages 125-132.
    19. Alisher Aldashev, 2012. "Occupational and Locational Substitution: Measuring the Effect of Occupational and Regional Mobility," LABOUR, CEIS, vol. 26(1), pages 108-123, March.
    20. Miriam Frey & Carmen Wieslhuber, 2011. "Do Kazakh Regions Converge?," Memoranda - Policy Papers 52, Institut für Ost- und Südosteuropaforschung (Institute for East and Southeast European Studies).
    21. Pietro Peretto & John J. Seater, 2006. "Augmentation or Elimination?," DEGIT Conference Papers c011_060, DEGIT, Dynamics, Economic Growth, and International Trade.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Capolupo, Rosa, 2009. "The New Growth Theories and Their Empirics after Twenty Years," Economics - The Open-Access, Open-Assessment E-Journal (2007-2020), Kiel Institute for the World Economy (IfW Kiel), vol. 3, pages 1-72.
    2. Jens K. Perret, 2019. "Regional Convergence in the Russian Federation: Spatial and Temporal Dynamics," Journal of Quantitative Economics, Springer;The Indian Econometric Society (TIES), vol. 17(1), pages 11-39, March.
    3. Yerken Turganbayev, 2016. "Regional convergence in Kazakhstan," Post-Communist Economies, Taylor & Francis Journals, vol. 28(3), pages 314-334, July.
    4. ?gel de la Fuente, "undated". "Convergence Across Countries And Regions: Theory And Empirics," UFAE and IAE Working Papers 447.00, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC).
    5. Douglas Holtz-Eakin, 1992. "Solow and the States: Capital Accumulation, Productivity and Economic Growth," NBER Working Papers 4144, National Bureau of Economic Research, Inc.
    6. Cem Ertur & Julie Le Gallo & Catherine Baumont, 2006. "The European Regional Convergence Process, 1980-1995: Do Spatial Regimes and Spatial Dependence Matter?," International Regional Science Review, , vol. 29(1), pages 3-34, January.
    7. Fafchamps, Marcel, 1997. "Mobile Capital, Local Externalities, and Industrialization," Journal of Comparative Economics, Elsevier, vol. 25(3), pages 345-365, December.
    8. Aleh Mazol, 2016. "Spatial wage inequality in Belarus," BEROC Working Paper Series 35, Belarusian Economic Research and Outreach Center (BEROC).
    9. Hakki Kutay Bolkol, 2019. "Analysis of Regional Income Convergence in Turkey," International Journal of Research in Business and Social Science (2147-4478), Center for the Strategic Studies in Business and Finance, vol. 8(2), pages 01-28, April.
    10. Roberto Ezcurra, 2001. "Convergencia Y Cambio Estructural En La Unión Europea," Documentos de Trabajo - Lan Gaiak Departamento de Economía - Universidad Pública de Navarra 0111, Departamento de Economía - Universidad Pública de Navarra.
    11. Kutub Uddin & Zohurul Anis & Muhammad Jakir Hossain & Zohurul Islam Shamol, 2016. "Examining Convergence in Per Capita Agricultural Production across Selected Asian countries," International Journal of Academic Research in Business and Social Sciences, Human Resource Management Academic Research Society, International Journal of Academic Research in Business and Social Sciences, vol. 6(10), pages 178-194, October.
    12. Cristina D. Checherita, 2009. "Variations on economic convergence: The case of the United States," Papers in Regional Science, Wiley Blackwell, vol. 88(2), pages 259-278, June.
    13. Yvonne Schindele, 2010. "How Long Does it Take to Become an Entrepreneurial Society - The Case of German Convergence in Self-Employment," Jena Economics Research Papers 2010-015, Friedrich-Schiller-University Jena.
    14. Jan Nevima & Ingrid Majerová, 2015. "Application of ß – Convergence Approach in Visegrad Four Regions," Working Papers 0004, Silesian University, School of Business Administration.
    15. Aldashev, Alisher & Dietz, Barbara, 2014. "Economic and spatial determinants of interregional migration in Kazakhstan," Economic Systems, Elsevier, vol. 38(3), pages 379-396.
    16. Andrew Bernard & Márcio Gomes Pinto Garcia, 1997. "Public and private provision of infrastructure and economic development," Textos para discussão 375, Department of Economics PUC-Rio (Brazil).
    17. Eckey, Hans-Friedrich & Türck, Matthias, 2007. "Convergence of EU-Regions. A Literature Report," INVESTIGACIONES REGIONALES - Journal of REGIONAL RESEARCH, Asociación Española de Ciencia Regional, issue 10, pages 5-32.
    18. Ronny Correa-Quezada & Lucía Cueva-Rodríguez & José Álvarez-García & María de la Cruz del Río-Rama, 2020. "Application of the Kernel Density Function for the Analysis of Regional Growth and Convergence in the Service Sector through Productivity," Mathematics, MDPI, vol. 8(8), pages 1-20, July.
    19. de la Fuente, Angel, 1997. "The empirics of growth and convergence: A selective review," Journal of Economic Dynamics and Control, Elsevier, vol. 21(1), pages 23-73, January.
    20. Juan Brida & Nicolás Garrido & Francesco Mureddu, 2014. "Italian economic dualism and convergence clubs at regional level," Quality & Quantity: International Journal of Methodology, Springer, vol. 48(1), pages 439-456, January.

    More about this item

    Keywords

    convergence; endogenous growth; Kazakhstan; capital intensive technology; nonlinear least squares; spatial correlation;
    All these keywords.

    JEL classification:

    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • P25 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - Urban, Rural, and Regional Economics
    • P23 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - Factor and Product Markets; Industry Studies; Population

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ost:wpaper:307. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Kseniia Gatskova (email available below). General contact details of provider: https://edirc.repec.org/data/osteide.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.