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Bridging the barriers: knowledge connections, productivity and capital accumulation

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  • R. Grafton

    ()

  • Tom Kompas

    ()

  • P. Owen

    ()

Abstract

The paper explains the large differences in cross-country productivity performance by modeling and testing the effects of social barriers to communication on productivity and capital accumulation. In an optimal growth model, social barriers to communication that impede the formation of knowledge connections are shown to reduce both transitory and steady-state levels of total factor productivity (TFP), per capita consumption, and reproducible capital. A ‘bridging’ parameter in the growth model that lowers the disutility of forming knowledge connections generates testable and dynamic implications about the effects of social barriers on capital, consumption, and productivity. Extensive empirical testing of the theoretical propositions yields a robust and theoretically consistent result — linguistic barriers to communication reduce productivity and capital accumulation. The findings provide a theoretical justification and a robust explanation for cross-country differences in TFP, and fresh insights into how productivity ‘catch up’ may be initiated.
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Suggested Citation

  • R. Grafton & Tom Kompas & P. Owen, 2007. "Bridging the barriers: knowledge connections, productivity and capital accumulation," Journal of Productivity Analysis, Springer, vol. 28(3), pages 219-231, December.
  • Handle: RePEc:kap:jproda:v:28:y:2007:i:3:p:219-231
    DOI: 10.1007/s11123-007-0054-6
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    Cited by:

    1. Soares, Helena & Sequeira, Tiago Neves & Marques, Pedro Macias & Gomes, Orlando & Ferreira-Lopes, Alexandra, 2018. "Social infrastructure and the preservation of physical capital: Equilibria and transitional dynamics," Applied Mathematics and Computation, Elsevier, vol. 321(C), pages 614-632.
    2. repec:bla:asiaps:v:4:y:2017:i:1:p:20-37 is not listed on IDEAS
    3. repec:eee:wdevel:v:96:y:2017:i:c:p:145-162 is not listed on IDEAS
    4. Ratna, Nazmun N. & Quentin Grafton, R. & Kompas, Tom, 2009. "Is diversity bad for economic growth?: Evidence from state-level data in the US," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 38(6), pages 859-870, December.
    5. Tran, Thi Bich & Grafton, R. Quentin & Kompas, Tom, 2009. "Institutions matter: The case of Vietnam," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 38(1), pages 1-12, January.
    6. Knowles, Stephen, 2006. "Is Social Capital Part of the Institutions Continuum and is it a Deep Determinant of Development?," WIDER Working Paper Series 025, World Institute for Development Economic Research (UNU-WIDER).
    7. Nazmun N. Ratna & Quentin Grafton & Ian A. MacDonald, 2012. "Does Multiculturalism Pay? Empirical Evidence from the United States and Canada," Economic Papers, The Economic Society of Australia, vol. 31(4), pages 401-417, December.
    8. R. Grafton & Tom Kompas & P. Owen, 2007. "Bridging the barriers: knowledge connections, productivity and capital accumulation," Journal of Productivity Analysis, Springer, vol. 28(3), pages 219-231, December.
    9. Nguyen, Hoa-Thi-Minh & Kompas, Tom & Breusch, Trevor & Ward, Michael B., 2017. "Language, Mixed Communes, and Infrastructure: Sources of Inequality and Ethnic Minorities in Vietnam," World Development, Elsevier, vol. 96(C), pages 145-162.
    10. repec:eee:ecanpo:v:55:y:2017:i:c:p:1-13 is not listed on IDEAS

    More about this item

    Keywords

    Knowledge connections; Productivity; Economic growth; O41; C61; C21;

    JEL classification:

    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models
    • C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models

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