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On the measurement of technological progress across countries

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  • Jakub Growiec

    (National Bank of Poland, Economic Institute; Warsaw School of Economics, Institute of Econometrics)

Abstract

The article considers 22 alternative empirical measures of country-level “technological progress”, computed for 19 highly developed OECD countries over the period 1970–2000 based on (i) the neoclassical growth accounting approach that adopts the Cobb-Douglas production function specification, (ii) a nonparametric approach where the world technology frontier (WTF) is constructed with Data Envelopment Analysis, and (iii) a “hybrid” approach that combines the two. Measures of TFP growth (capturing all output gains actually obtained in a given country that cannot be traced back to factor accumulation) are carefully distinguished from measures of technical change (capturing only technological progress shifting the WTF). Empirical properties of all 22 measures are compared according to a range of characteristics frequently discussed in the macroeconomic literature. The conclusion is that the choice of appropriate measurement methodology should be suited to the question addressed in each specific study, the simple growth accounting approach is generally insufficient, and particular attention should be paid to the empirical treatment of technical efficiency changes. The results are also sensitive to the precision of WTF estimation.

Suggested Citation

  • Jakub Growiec, 2013. "On the measurement of technological progress across countries," Bank i Kredyt, Narodowy Bank Polski, vol. 44(5), pages 467-504.
  • Handle: RePEc:nbp:nbpbik:v:44:y:2013:i:5:p:467-504
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    Cited by:

    1. Jakub Growiec & Anna Pajor & Dorota Gorniak & Artur Predki, 2015. "The shape of aggregate production functions: evidence from estimates of the World Technology Frontier," Bank i Kredyt, Narodowy Bank Polski, vol. 46(4), pages 299-326.
    2. Paul E. Brockway & Harry Saunders & Matthew K. Heun & Timothy J. Foxon & Julia K. Steinberger & John R. Barrett & Steve Sorrell, 2017. "Energy Rebound as a Potential Threat to a Low-Carbon Future: Findings from a New Exergy-Based National-Level Rebound Approach," Energies, MDPI, Open Access Journal, vol. 10(1), pages 1-24, January.
    3. Paul E. Brockway & Matthew K. Heun & João Santos & John R. Barrett, 2017. "Energy-Extended CES Aggregate Production: Current Aspects of Their Specification and Econometric Estimation," Energies, MDPI, Open Access Journal, vol. 10(2), pages 1-23, February.
    4. Matthew K. Heun & João Santos & Paul E. Brockway & Randall Pruim & Tiago Domingos & Marco Sakai, 2017. "From Theory to Econometrics to Energy Policy: Cautionary Tales for Policymaking Using Aggregate Production Functions," Energies, MDPI, Open Access Journal, vol. 10(2), pages 1-44, February.
    5. Enrico Marelli & Marcello Signorelli & Joanna Tyrowicz, 2012. "Crises and Joint Employment–Productivity Dynamics: A Comparative Perspective for European Countries," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 54(2), pages 361-394, June.

    More about this item

    Keywords

    technological progress; growth accounting; TFP growth; technical change; aggregate production function;

    JEL classification:

    • E23 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Production
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
    • 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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