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Catch-Up and Leapfrog between the USA and Japan

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  • Gavin Cameron

Abstract

The growth process for a technological leader is different from that of a follower. While followers can grow through imitation and capital deepening, a leader must undertake original research. This suggests that as the gap between the leader and the follower narrows, the follower must undertake more formal R&D and possibly face a slower overall growth rate. This paper examines these ideas by discussing some simple models of technological catch-up and convergence and then applying them to the relative growth experiences of US and Japanese manufacturing. We construct measures of relative total factor productivity for eleven Japanese manufacturing industries and test whether a smaller productivity gap leads to slower growth, and whether R&D takes over as the engine of growth as Japan approaches the technological frontier. Our results suggest that Japanese and US productivity have been growing a similar rates since the mid-1970s, and the some of the Japanese growth slowdown is attributable to the exhaustion of imitation possibilities. Furthermore, since Japanese total factor productivity growth is faster than US growth before the mid-1970s, our results cast doubt on much of the cross-section convergence literature that assumes similar technology parameters across countries.

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Bibliographic Info

Paper provided by University of Oxford, Department of Economics in its series Economics Series Working Papers with number 1998-W16.

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Date of creation: 01 Sep 1998
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Handle: RePEc:oxf:wpaper:1998-w16

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Keywords: Innovation; Openness; Research and Development; Human Capital; Economic Growth; Total Factor Productivity.;

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Cited by:
  1. Rachel Griffith & Helen Simpson & Stephen Redding, 2002. "Productivity convergence and foreign ownership at the establishment level," IFS Working Papers W02/22, Institute for Fiscal Studies.
  2. Griffith, Rachel & Redding, Stephen J & Simpson, Helen, 2004. "Foreign Ownership and Productivity: New Evidence from the Service Sector and the R&D Lab," CEPR Discussion Papers 4691, C.E.P.R. Discussion Papers.

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