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Market Structure, Technology Spillovers, and Persistence in Productivity Differentials

  • Yin-Wong Cheung
  • Antonio Garcia Pascual

    (University of California - Santa Cruz and International Monetary Fund)

Using data from 11 manufacturing industries in 17 OECD countries, this paper empirically investigates the determinants of cross-country differences in the persistence of productivity differentials. Specifically, the paper focuses on the effects of product market structure and technology diffusion. It is found that the manufacturing industries display a wide range of convergence rates. Consistent with theories, the persistence of productivity differentials is found to be positively correlated with the price-cost margin—the proxy for market monopolistic behavior. The proxies for technology diffusion, however, do not exhibit consistently significant effect. Among the conditioning macro variables, productivity convergence appears to be enhanced by human capital but deterred by government spending.

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File URL: http://www2.selu.edu/orgs/ijae/Journal%201/IJAE%20Sept%202004%20A1%20Cheung%20Garcia%20Pascual%20%2009%2024%2004%20RV4.pdf
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Article provided by Department of General Business, Southeastern Louisiana University in its journal The International Journal of Applied Economics.

Volume (Year): 1 (2004)
Issue (Month): 1 (September)
Pages: 1-23

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Handle: RePEc:ija:ancoec:v:1:y:2004:i:1:p:1-23
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  1. Aghion, P. & Howitt, P., 1989. "A Model Of Growth Through Creative Destruction," UWO Department of Economics Working Papers 8904, University of Western Ontario, Department of Economics.
  2. Bernard, Andrew B & Jones, Charles I, 1996. "Comparing Apples to Oranges: Productivity Convergence and Measurement across Industries and Countries," American Economic Review, American Economic Association, vol. 86(5), pages 1216-38, December.
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  7. Sala-i-martin, X. & Barro, R.J., 1995. "technological Diffusion, Convergence and Growth," Papers 735, Yale - Economic Growth Center.
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  9. Bernard, Andrew B & Jones, Charles I, 1996. "Productivity across Industries and Countries: Time Series Theory and Evidence," The Review of Economics and Statistics, MIT Press, vol. 78(1), pages 135-46, February.
  10. Barro, Robert J, 1991. "Economic Growth in a Cross Section of Countries," The Quarterly Journal of Economics, MIT Press, vol. 106(2), pages 407-43, May.
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