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Incorporating temporal and country heterogeneity in growth accounting—an application to EU-KLEMS

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  • A. Peyrache

    () (The University of Queensland)

  • A. N. Rambaldi

    (The University of Queensland)

Abstract

The paper derives measures of sectoral productivity from a model specification that allows for cross-sectional specific trends and time varying slopes in panel models with fixed N. The specification nests a number of commonly used panel data models introduced in the literature which deal with group specific trends. The econometric model is represented in state-space form. We provide a production frontier interpretation of this group specific temporal variation and derive a post-estimation growth accounting to provide a quantitative assessment of the main factors behind sectoral labour productivity growth. We make use of the EU-KLEMS dataset, covering the period 1977–2007 for 13 countries and 20 sectors of each economy.

Suggested Citation

  • A. Peyrache & A. N. Rambaldi, 2017. "Incorporating temporal and country heterogeneity in growth accounting—an application to EU-KLEMS," Journal of Productivity Analysis, Springer, vol. 47(2), pages 143-166, April.
  • Handle: RePEc:kap:jproda:v:47:y:2017:i:2:d:10.1007_s11123-017-0498-2
    DOI: 10.1007/s11123-017-0498-2
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    References listed on IDEAS

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