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Are capital shares higher in poor countries? Evidence from Industrial Surveys

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  • Francisco Rodríguez

    ()
    (Economics Department, Wesleyan University)

  • Daniel Ortega

    ()
    (Center for Finance, Instituto de Estudios Superiores de Administración)

Abstract

This paper presents new evidence on the cross-country correlation between factor shares and per capita income. The evidence comes from UNIDO and OECD databases of industrial surveys designed to measure economic activity in the corporate manufacturing sector. We show that a statistically significant negative correlation is present in both data sets. The correlation is robust to controlling for methodological variations in the valuation, concept and definition of value added and labor income. It is also present within 3 and 4-digit industries. We argue that previous evidence on capital shares derived from national accounts statistics is consistent with the negative relation that we find on the industrial survey data.

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Bibliographic Info

Paper provided by Wesleyan University, Department of Economics in its series Wesleyan Economics Working Papers with number 2006-023.

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Length: 40 pages
Date of creation: Sep 2006
Date of revision:
Handle: RePEc:wes:weswpa:2006-023

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  9. Samuel Bentolila & Gilles Saint Paul, 1999. "Explaining movements in the labor share," Economics Working Papers 374, Department of Economics and Business, Universitat Pompeu Fabra.
  10. Dani Rodrik, 1999. "Democracies Pay Higher Wages," The Quarterly Journal of Economics, MIT Press, vol. 114(3), pages 707-738, August.
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Cited by:
  1. Decreuse, Bruno & Maarek, Paul, 2008. "FDI and the labor share in developing countries: a theory and some evidence," MPRA Paper 11224, University Library of Munich, Germany.
  2. Paul Maarek & Elsa Orgiazzi, 2011. "Which factor bears the cost of currency crises?," Economics Working Paper Archive (University of Rennes 1 & University of Caen) 201101, Center for Research in Economics and Management (CREM), University of Rennes 1, University of Caen and CNRS.
  3. Fanti, Luciano & Gori, Luca, 2009. "Population and neoclassical economic growth: A new child policy perspective," Economics Letters, Elsevier, vol. 104(1), pages 27-30, July.
  4. Luciano Boggio & Vincenzo Dall'Aglio & Marco Magnani, 2009. "On Labour Shares in Recent Decades: A Survey," DISCE - Quaderni dell'Istituto di Teoria Economica e Metodi Quantitativi itemq0957, Università Cattolica del Sacro Cuore, Dipartimenti e Istituti di Scienze Economiche (DISCE).
  5. Bekaert, Geert & Harvey, Campbell R. & Lundblad, Christian, 2011. "Financial Openness and Productivity," World Development, Elsevier, vol. 39(1), pages 1-19, January.
  6. Fanti, Luciano & Gori, Luca, 2010. "PAYG pensions and economic cycles," MPRA Paper 19984, University Library of Munich, Germany.
  7. Paul Maarek, 2012. "Labor share, Informal sector and Development," THEMA Working Papers 2012-34, THEMA (THéorie Economique, Modélisation et Applications), Université de Cergy-Pontoise.
  8. Douglas Gollin, 2008. "Labour's Share of Income," Center for Development Economics 2007-02, Department of Economics, Williams College.
  9. Anders Isaksson, 2009. "The UNIDO World Productivity Database: An Overview," International Productivity Monitor, Centre for the Study of Living Standards, vol. 18, pages 38-50, Spring.

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