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Kaldor-Verdoorn’s law and increasing returns to scale: a comparison across developed countries

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  • Ofria, Ferdinando
  • Millemaci, Emanuele

Abstract

The object of this study is to investigate the validity of the Kaldor-Verdoorn’s Law in explaining the long run determinants of the labor productivity growth for the manufacturing sector of some developed economies (Western European Countries, Australia, Canada, Japan and United States). We consider the period 1973-2006 using data provided by the European Commission - Economics and Financial Affairs. Our findings suggest that the law is valid for the manufacturing of Italy, US, Belgium and Australia. Capital growth and labor cost growth do not appear relevant in explaining productivity growth. The estimated Verdoorn coefficients are found to be stable throughout the period.

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Bibliographic Info

Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 30941.

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Date of creation: 23 Oct 2010
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Handle: RePEc:pra:mprapa:30941

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Keywords: increasing returns; Kaldor-Verdoorn law; productivity growth; manufacturing sector;

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Cited by:
  1. Someshwar Rao & Jiang Li, 2013. "Explaining Slower Productivity Growth: The Role of Weak Demand Growth," International Productivity Monitor, Centre for the Study of Living Standards, vol. 26, pages 3-19, Fall.
  2. Centorrino M. & Ofria F. & Farinella D., 2010. "Convergence and divergence processes between the Mezzogiorno and the Centre- North ten years after the adoption of the EMU," Rivista economica del Mezzogiorno, Società editrice il Mulino, issue 3, pages 453-486.
  3. Ferdinando Ofria, 2012. "Twelve Years on from the Adoption of the Emu: An Ex-Post Assessment on the Process of Convergence of Southern and Central-Northern Italy," International Journal of Academic Research in Accounting, Finance and Management Sciences, Human Resource Management Academic Research Society, International Journal of Academic Research in Accounting, Finance and Management Sciences, vol. 2(Special 1), pages 326-339, May.
  4. Fazio, Giorgio & Maltese, Enza & Piacentino, Davide, 2011. "Estimating Verdoorn law for Italian firms and regions," MPRA Paper 35388, University Library of Munich, Germany.

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