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Heterogeneity, Trust, Human Capital and Productivity Growth: Decomposition Analysis

  • Eiji Yamamura
  • Inyong Shin

This paper uses panel data from Japan to decompose productivity growth measured by the growth of output per labour unit into three components of efficiency improvement, capital accumulation and technological progress. It then examines their determinants through a dynamic panel model. This paper focuses on how inequality, trust and humans affect the above components. The main findings derived from empirical estimations are: (1) Inequality impedes not only improvements in efficiency but also capital accumulation. (2) A degree of trust promotes efficiency improvements and capital accumulation at the same time. However, human capital merely enhances improvements in efficiency.

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Article provided by Economics and Econometrics Society in its journal Journal of Economics and Econometrics.

Volume (Year): 55 (2012)
Issue (Month): 2 ()
Pages: 51-77

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Handle: RePEc:eei:journl:v:55:y:2012:i:2:p:51-77
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  27. Knack, Stephen & Keefer, Philip, 1997. "Does Social Capital Have an Economic Payoff? A Cross-Country Investigation," The Quarterly Journal of Economics, MIT Press, vol. 112(4), pages 1251-88, November.
  28. Eiji Yamamura & Tetsushi Sonobe & Keijiro Otsuka, 2005. "Time path in innovation, imitation, and growth: the case of the motorcycle industry in postwar Japan," Journal of Evolutionary Economics, Springer, vol. 15(2), pages 169-186, January.
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