IDEAS home Printed from https://ideas.repec.org/p/pra/mprapa/1114.html
   My bibliography  Save this paper

A Versus K Revisited: Evidence from Selected MENA Countries

Author

Listed:
  • Abu-Qarn, Aamer
  • Abu-Bader, Suleiman

Abstract

This paper reconsiders the A versus K debate, namely, which factor is the leading contributor to economic growth? productivity gains (A) or factor accumulation (K). The growth accounting analysis is conducted for ten Middle Eastern and North African (MENA) countries over the period 1960-1998. The long-run share of capital in national income is estimated using cointegration (country-specific) and panel data (region-specific) methods. We find that for most of the countries in our sample the share of capital is much higher than the conventional share of 0.3-0.4. The growth accounting exercise conducted with the incorporation of human capital reveals that for the MENA region the contribution of productivity gains to economic growth is negligible and frequently even detrimental. Thus, we conclude that it is factor (both physical and human) accumulation that drives the economic performance of MENA economies.

Suggested Citation

  • Abu-Qarn, Aamer & Abu-Bader, Suleiman, 2005. "A Versus K Revisited: Evidence from Selected MENA Countries," MPRA Paper 1114, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:1114
    as

    Download full text from publisher

    File URL: https://mpra.ub.uni-muenchen.de/1114/1/MPRA_paper_1114.pdf
    File Function: original version
    Download Restriction: no
    File URL: https://mpra.ub.uni-muenchen.de/22280/1/MPRA_paper_22280.pdf
    File Function: revised version
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. George Psacharopoulos, 1985. "Returns to Education: A Further International Update and Implications," Journal of Human Resources, University of Wisconsin Press, vol. 20(4), pages 583-604.
    2. Jacob A. Mincer, 1974. "Introduction to "Schooling, Experience, and Earnings"," NBER Chapters, in: Schooling, Experience, and Earnings, pages 1-4, National Bureau of Economic Research, Inc.
    3. Barro, Robert J. & Lee, Jong-Wha, 1993. "International comparisons of educational attainment," Journal of Monetary Economics, Elsevier, vol. 32(3), pages 363-394, December.
    4. Barro, Robert J & Lee, Jong-Wha, 2001. "International Data on Educational Attainment: Updates and Implications," Oxford Economic Papers, Oxford University Press, vol. 53(3), pages 541-563, July.
    5. Jacob A. Mincer, 1974. "Schooling, Experience, and Earnings," NBER Books, National Bureau of Economic Research, Inc, number minc74-1, July.
    6. Gregory Mankiw, 1995. "The Growth of Nations," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 26(1, 25th A), pages 275-326.
    7. Psacharopoulos, George, 1994. "Returns to investment in education: A global update," World Development, Elsevier, vol. 22(9), pages 1325-1343, September.
    8. Caselli, Francesco & Esquivel, Gerardo & Lefort, Fernando, 1996. "Reopening the Convergence Debate: A New Look at Cross-Country Growth Empirics," Journal of Economic Growth, Springer, vol. 1(3), pages 363-389, September.
    9. World Bank, 2003. "World Development Indicators 2003," World Bank Publications - Books, The World Bank Group, number 13920, December.
    10. Jacob A. Mincer, 1974. "Schooling and Earnings," NBER Chapters, in: Schooling, Experience, and Earnings, pages 41-63, National Bureau of Economic Research, Inc.
    11. N. Gregory Mankiw & David Romer & David Weil, 1990. "A Contribution to the Empirics of Economic Growth," Working Papers 1990-24, Brown University, Department of Economics.
    12. Johansen, Soren, 1988. "Statistical analysis of cointegration vectors," Journal of Economic Dynamics and Control, Elsevier, vol. 12(2-3), pages 231-254.
    13. Nehru, Vikram & Swanson, Eric & Dubey, Ashutosh, 1995. "A new database on human capital stock in developing and industrial countries: Sources, methodology, and results," Journal of Development Economics, Elsevier, vol. 46(2), pages 379-401, April.
    14. Peter C. B. Phillips & Bruce E. Hansen, 1990. "Statistical Inference in Instrumental Variables Regression with I(1) Processes," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 57(1), pages 99-125.
    15. D. W. Jorgenson & Z. Griliches, 1967. "The Explanation of Productivity Change," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 34(3), pages 249-283.
    16. Harrison, Ann, 1996. "Openness and growth: A time-series, cross-country analysis for developing countries," Journal of Development Economics, Elsevier, vol. 48(2), pages 419-447, March.
    17. 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.
    18. World Bank, 2000. "World Development Indicators 2000," World Bank Publications - Books, The World Bank Group, number 13828, December.
    19. Norsworthy, J R, 1984. "Growth Accounting and Productivity Measurement," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 30(3), pages 309-329, September.
    20. Abdelhak Senhadji, 2000. "Sources of Economic Growth: An Extensive Growth Accounting Exercise," IMF Staff Papers, Palgrave Macmillan, vol. 47(1), pages 1-6.
    21. Alwyn Young, 1995. "The Tyranny of Numbers: Confronting the Statistical Realities of the East Asian Growth Experience," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 110(3), pages 641-680.
    22. Mr. Abdelhak S Senhadji, 1999. "Sources of Economic Growth: An Extensive Growth Accounting Exercise," IMF Working Papers 1999/077, International Monetary Fund.
    23. Susan M. Collins & Barry P. Bosworth, 1996. "Economic Growth in East Asia: Accumulation versus Assimilation," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 27(2), pages 135-204.
    24. Amer Bisat, 1997. "Growth, Investment, and Savings in the Arab Economies," IMF Working Papers 1997/085, International Monetary Fund.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Hans Joachim Schalk, "undated". "Analysing Growth and Productivity in Syria by Growth Accounting," Working Papers 201176, Institute of Spatial and Housing Economics, Munster Universitary.
    2. Schalk, Hans Joachim, 2011. "Analysing growth and productivity in Syria by growth accounting," CAWM Discussion Papers 50, University of Münster, Münster Center for Economic Policy (MEP).

    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. Abu-Qarn, Aamer S. & Abu-Bader, Suleiman, 2007. "Sources of Growth Revisited: Evidence from Selected MENA Countries," World Development, Elsevier, vol. 35(5), pages 752-771, May.
    2. Angel de la Fuente & Antonio Ciccone, 2003. "Human capital in a global and knowledge-based economy," UFAE and IAE Working Papers 562.03, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC).
    3. Wößmann, Ludger, 2000. "Specifying Human Capital: A Review, Some Extensions, and Development Effects," Kiel Working Papers 1007, Kiel Institute for the World Economy (IfW Kiel).
    4. Veloso, Fernando A. & Ferreira, Pedro Cavalcanti & Pessôa, Samuel de Abreu, 2004. "The evolution of international output differences (1960-2000): From factors to productivity," FGV EPGE Economics Working Papers (Ensaios Economicos da EPGE) 548, EPGE Brazilian School of Economics and Finance - FGV EPGE (Brazil).
    5. Les OXxley & Ttrinh Le & John Gibson, 2008. "Measuring Human Capital: Alternative Methods and International Evidence," Korean Economic Review, Korean Economic Association, vol. 24, pages 283-344.
    6. Daniel Cohen & Marcelo Soto, 2007. "Growth and human capital: good data, good results," Journal of Economic Growth, Springer, vol. 12(1), pages 51-76, March.
    7. Michael S. Delgado & Daniel J. Henderson & Christopher F. Parmeter, 2014. "Does Education Matter for Economic Growth?," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 76(3), pages 334-359, June.
    8. Daren, Conrad, 2007. "Education and Economic Growth: Is There a Link?," MPRA Paper 18176, University Library of Munich, Germany, revised 2009.
    9. Marcelo Soto, 2006. "The Causal Effect of Education on Aggregate Income," Working Papers 0605, International Economics Institute, University of Valencia.
    10. Kogel, Tomas, 2005. "Youth dependency and total factor productivity," Journal of Development Economics, Elsevier, vol. 76(1), pages 147-173, February.
    11. Papageorgiou, Chris & Perez-Sebastian, Fidel, 2004. "Can Transition Dynamics Explain The International Output Data?," Macroeconomic Dynamics, Cambridge University Press, vol. 8(4), pages 466-492, September.
    12. Hanushek, Eric A. & Luque, Javier A., 2003. "Efficiency and equity in schools around the world," Economics of Education Review, Elsevier, vol. 22(5), pages 481-502, October.
    13. Martin Werding & Sonja Munz & Vera Gács, 2008. "Fertility and prosperity : links between demography and economic growth," ifo Forschungsberichte, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, number 42.
    14. Erich Gundlach, 1997. "Human capital and economic development: A macroeconomic assessment," Intereconomics: Review of European Economic Policy, Springer;ZBW - Leibniz Information Centre for Economics;Centre for European Policy Studies (CEPS), vol. 32(1), pages 23-35, January.
    15. Francis Teal, 2010. "Higher Education and Economic Development in Africa: a Review of Channels and Interactions," Economics Series Working Papers CSAE WPS/2010-25, University of Oxford, Department of Economics.
    16. Eric A. Hanushek & Ludger Woessmann, 2008. "The Role of Cognitive Skills in Economic Development," Journal of Economic Literature, American Economic Association, vol. 46(3), pages 607-668, September.
    17. Ludger Wößmann, 2003. "Specifying Human Capital," Journal of Economic Surveys, Wiley Blackwell, vol. 17(3), pages 239-270, July.
    18. David E. Bloom & David Canning & Jaypee Sevilla, 2002. "Technological Diffusion, Conditional Convergence, and Economic Growth," NBER Working Papers 8713, National Bureau of Economic Research, Inc.
    19. ?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).
    20. Mark M. Spiegel, 2001. "Financial development and growth: are the APEC nations unique?," Pacific Basin Working Paper Series 2001-04, Federal Reserve Bank of San Francisco.

    More about this item

    Keywords

    Growth Accounting; Productivity and Factor Accumulation; MENA; Middle-East; Cointegration; Panel Data;
    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
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East
    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes

    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:pra:mprapa:1114. 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: Joachim Winter (email available below). General contact details of provider: https://edirc.repec.org/data/vfmunde.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.