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Productivity, Factor Accumulation and Social Networks: Theory and Evidence

Author

Listed:
  • R. Quentin Grafton

    () (Australian National University, Asia Pacific School of Economics and Government)

  • Tom Kompas

    () (Australian National University, Asia Pacific School of Economics and Governmen)

  • P. Dorian Owen

    (university of Otago, Department of Economics)

Abstract

The paper analyzes how social barriers to communication affect economy-wide productivity and factor accumulation. Using a dynamic model of an economy that includes a reproducible capital stock (physical or human) and effective labor, a negative relationship is shown to exist between social barriers to communication and total factor productivity (TFP), per capita consumption and reproducible capital. Robust estimates obtained from cross-country data are consistent with the model’s predictions. The theory and empirical results help explain cross-country differences in TFP, the high productivity performance of leading industrialized countries and how productivity ‘catch up’ may be initiated.

Suggested Citation

  • R. Quentin Grafton & Tom Kompas & P. Dorian Owen, 2004. "Productivity, Factor Accumulation and Social Networks: Theory and Evidence," Economics and Environment Network Working Papers 0401, Australian National University, Economics and Environment Network.
  • Handle: RePEc:anu:eenwps:0401
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    More about this item

    Keywords

    productivity; dynamic model; barriers to communication;

    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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