Evaluating Economic Theories of Growth and Inequality: A Study of the Danish Economy
AbstractWe present a model for studying regional and sectoral variation in total factor productivity (TFP) and develop an empirical test, based on the skewness of TFP distribution, to empirically distinguish between different growth theories. While negative skewness is consistent with the neo-Schumpeterian idea of catching up with leaders, zero skewness supports the neoclassical view that deviations from the frontier reflect only idiosyncratic productivity shocks. We argue that positive skewness corresponds to a model where the combination of exogenous technology with non-transferable knowledge accumulated in specific sectors and regions explains TFP. This argument provides the framework for an empirical model based on stochastic frontier analysis. The model is used to analyse regional and sectoral inequalities in productive efficiency across Danish sectors and regions.
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Bibliographic InfoPaper provided by Centre for Dynamic Macroeconomic Analysis in its series CDMA Working Paper Series with number 200723.
Date of creation: 15 Nov 2007
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Regional growth models; Total Factor Productivity; Stochastic Frontier Analysis; Skewness.;
Find related papers by JEL classification:
- D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
- O18 - Economic Development, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
- O3 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights
- O4 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity
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