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Mind the gap! International comparisons of productivity in services and goods production

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  • Robert Inklaar
  • Marcel P. Timmer
  • Bart van Ark

Abstract

In this paper, we make a comparison of industry output, inputs and productivity growth and levels between seven advanced economies (Australia, Canada, France, Germany, Netherlands, UK and U.S.). Our industry-level growth accounts go up to 2003, and make use of input data on labour quantity (hours) and quality (schooling levels), and distinguish between six different types of capital assets (including three ICT assets). The comparison of levels relies on multilateral, industry-specific purchasing power parities (PPPs) for output and inputs, within a consistent input-output framework for the year 1997. Our results show that differences in productivity growth and levels can mainly be traced to market services, not to goods-producing industries. Some of the strong productivity growth in market services in Anglo-Saxon countries may be related to relatively low productivity levels compared to the U.S. In contrast, services productivity levels in continental European countries were on par with the U.S. in 1997, but growth in Europe was much weaker since then. In terms of factor input use, the U.S. is very different from all other countries, mostly because of its more intensive use of ICT capital.

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  • Robert Inklaar & Marcel P. Timmer & Bart van Ark, 2006. "Mind the gap! International comparisons of productivity in services and goods production," Hi-Stat Discussion Paper Series d06-175, Institute of Economic Research, Hitotsubashi University.
  • Handle: RePEc:hst:hstdps:d06-175
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    References listed on IDEAS

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    Cited by:

    1. Neil Foster-McGregor & Johannes Pöschl, 2016. "Productivity effects of knowledge transfers through labour mobility," Journal of Productivity Analysis, Springer, vol. 46(2), pages 169-184, December.
    2. Joseph Francois & Bernard Hoekman, 2010. "Services Trade and Policy," Journal of Economic Literature, American Economic Association, vol. 48(3), pages 642-692, September.
    3. Henry van der Wiel & Harold Creusen & George van Leeuwen & Eugene van der Pijll, 2008. "Cross your border and look around," DEGIT Conference Papers c013_005, DEGIT, Dynamics, Economic Growth, and International Trade.
    4. Bart van Ark & Mary O’Mahony & Marcel P. Timmer, 2012. "Europe’s Productivity Performance in Comparative Perspective: Trends, Causes and Recent Developments," Chapters,in: Industrial Productivity in Europe, chapter 3 Edward Elgar Publishing.
    5. Pamfili Antipa & Marie-Elisabeth de la Serve, 2010. "International Comparisons of Industry-based Productivity Levels in the Financial and Business Service Sectors," International Productivity Monitor, Centre for the Study of Living Standards, vol. 19, pages 66-81, Spring.
    6. Henry van der Wiel & Harold Creusen & George van Leeuwen & Eugene Van der Pijll, 2012. "The Dutch Productivity Performance: Cross Your Border and Look Around," Chapters,in: Industrial Productivity in Europe, chapter 14 Edward Elgar Publishing.
    7. repec:rfe:zbefri:v:35:y:2017:i:2:p:487-518 is not listed on IDEAS
    8. Susanto Basu & John G. Fernald, 2008. "Information and communications technology as a general purpose technology: evidence from U.S. industry data," Economic Review, Federal Reserve Bank of San Francisco, pages 1-15.
    9. Halmai, Péter, 2015. "Az európai növekedési potenciál eróziója és válsága
      [Erosion and crisis in European growth potential]
      ," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(4), pages 379-414.
    10. V. Baugnet & D. Cornille & E. Dhyne & B. Robert, 2009. "Regulation and competition in the distribution sector in Belgium," Economic Review, National Bank of Belgium, issue iii, pages 33-57, September.
    11. Huang, Chien-Yu & Ji, Lei, 2013. "Knowledge-intensive business services and economic growth with endogenous market structure," Journal of Macroeconomics, Elsevier, vol. 38(PA), pages 95-106.
    12. Kyoji Fukao, 2013. "Explaining Japan's Unproductive Two Decades," Asian Economic Policy Review, Japan Center for Economic Research, vol. 8(2), pages 193-213, December.
    13. Mas, Matilde & Quesada, Javier & Robledo, Juan Carlos, 2007. "Las nuevas tecnologías y la competitividad industrial
      [New technologies and industrial competiveness]
      ," MPRA Paper 15826, University Library of Munich, Germany, revised 2007.
    14. World Bank Group, 2016. "Competitiveness of the Kyrgyz Economy in the Wake of Accession to the Eurasian Customs Union," World Bank Other Operational Studies 24252, The World Bank.
    15. Thierry Tressel, 2008. "Does Technological Diffusion Explain Australia’s Productivity Performance?," IMF Working Papers 08/4, International Monetary Fund.
    16. Kyoji Fukao & Tsutomu Miyagawa & Miho Takizawa, 2007. "Productivity Growth and Resource Reallocation in Japan," Hi-Stat Discussion Paper Series d07-224, Institute of Economic Research, Hitotsubashi University.
    17. Luc Soete, 2007. "From Industrial to Innovation Policy," Journal of Industry, Competition and Trade, Springer, vol. 7(3), pages 273-284, December.
    18. Mc Morrow, Kieran & Röger, Werner & Turrini, Alessandro, 2010. "Determinants of TFP growth: A close look at industries driving the EU-US TFP gap," Structural Change and Economic Dynamics, Elsevier, vol. 21(3), pages 165-180, August.
    19. Dankbaar, Ben & Vissers, Geert, 2009. "Of knowledge and work," MPIfG Working Paper 09/16, Max Planck Institute for the Study of Societies.
    20. Marcel P. Timmer & Robert Inklaar & Mary O'Mahony & Bart van Ark, 2011. "Productivity and Economic Growth in Europe: A Comparative Industry Perspective," International Productivity Monitor, Centre for the Study of Living Standards, vol. 21, pages 3-23, Spring.
    21. Paul Schreyer, 2007. "International Comparisons of Levels of Capital Input and Multi-Factor Productivity," German Economic Review, Verein für Socialpolitik, vol. 8, pages 237-254, May.
    22. ., 2013. "Europe's Productivity Performance in Comparative Perspective: Trends, Causes and Projections," Chapters,in: World Economic Performance, chapter 11, pages 290-316 Edward Elgar Publishing.
    23. Bart van Ark & Charles R. Hulten, 2007. "Innovation, Intangibles and Economic Growth: Towards A Comprehensive Accounting of the Knowledge Economy," Economics Program Working Papers 07-02, The Conference Board, Economics Program.

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