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Resource capacity and economic growth convergence

Author

Listed:
  • Barnabé Walheer

    (Université de Liège)

  • Sergio Perelman

    (Université de Liège)

Abstract

Resource accumulation has been identified, with technological change, as a major explanatory factor of economic growth convergence. At the same time, resource capacity may act as a growth limiting factor. Under-investment may have a moderator effect on the economic growth convergence process, while path-dependencies may be observed. Using a tailored non-parametric model and a unique sample of 92 countries all around the world for the 1965–2019 period, we study the role of resource capacity from a new angle. First, we measure potential countries’ under-investment. Next, we quantify its role in the economic growth convergence process. Our findings reveal that under-investment exists and that it represents a brake on economic growth convergence. However, such an effect can be counterbalanced by promoting technological advances or creating a more favourable resource environment. Finally, we run several sensitivity tests to assess the robustness of our findings.

Suggested Citation

  • Barnabé Walheer & Sergio Perelman, 2025. "Resource capacity and economic growth convergence," Journal of Productivity Analysis, Springer, vol. 63(3), pages 317-338, June.
    • Handle: RePEc:kap:jproda:v:63:y:2025:i:3:d:10.1007_s11123-025-00755-5
    DOI: 10.1007/s11123-025-00755-5
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    More about this item

    Keywords

    economic growth; convergence; under-investment; non-parametric;
    All these keywords.

    JEL classification:

    • C67 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Input-Output Models
    • L60 - Industrial Organization - - Industry Studies: Manufacturing - - - General
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence

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