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Productivity growth and catching up: a technology gap explanation

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  • Andrea Filippetti
  • Antonio Peyrache

Abstract

This paper seeks to explain why some countries have managed to catch up in terms of labor productivity over the period 1993–2007 in 76 countries. By integrating the technology gap research within the standard growth-accounting approach, we introduce a methodology which allows us to split total factor productivity (TFP) change into two components: conditional technical inefficiency and the magnitude of the technology gap. We find that labor productivity growth depends both on investment in fixed capital and TFP. Fast emerging economies exhibit patterns of growth based in particular on the reduction of the technology gap, confirming the role of investment in technological capabilities to spur productivity catch-up. Looking at change in the distribution of labor productivity, emerging countries managed to shift from low productivity toward a medium level of productivity thanks to technology accumulation. Less advanced countries cannot rely only on technology diffusion and learning by doing, policies for technological capabilities accumulation are necessary.

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  • Andrea Filippetti & Antonio Peyrache, 2017. "Productivity growth and catching up: a technology gap explanation," International Review of Applied Economics, Taylor & Francis Journals, vol. 31(3), pages 283-303, May.
    • Handle: RePEc:taf:irapec:v:31:y:2017:i:3:p:283-303
    DOI: 10.1080/02692171.2016.1249831
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    1. Rodrik, Dani, 1994. "King Kong Meets Godzilla: The World Bank and The East Asian Miracle," CEPR Discussion Papers 944, C.E.P.R. Discussion Papers.
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    1. Mensah, Emmanuel B. & Owusu, Solomon & Foster-McGregor, Neil, 2020. "Productive efficiency, technological change and catch up within Africa," MERIT Working Papers 2020-033, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    2. Ramani, Shyama V. & Urias, Eduardo, 2018. "When access to drugs meets catch-up: Insights from the use of CL threats to improve access to ARV drugs in Brazil," Research Policy, Elsevier, vol. 47(8), pages 1538-1552.
    3. Anatole Goundan, 2018. "Colonial Legacy and Economic Efficiency across Africa: A Metafrontier Approach," African Development Review, African Development Bank, vol. 30(2), pages 187-199, June.
    4. Randolph Luca Bruno & Elodie Douarin & Julia Korosteleva & Slavo Radosevic, 2022. "The Two Disjointed Faces of R&D and the Productivity Gap in Europe," Journal of Common Market Studies, Wiley Blackwell, vol. 60(3), pages 580-603, May.

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