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

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

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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File URL: http://hi-stat.ier.hit-u.ac.jp/research/discussion/2006/pdf/D06-175.pdf
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Paper provided by Institute of Economic Research, Hitotsubashi University in its series Hi-Stat Discussion Paper Series with number d06-175.

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Date of creation: Jul 2006
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Handle: RePEc:hst:hstdps:d06-175
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  1. Francesco Daveri, 2004. "Delayed IT Usage: Is It Really the Drag on Europe's Productivity?," CESifo Economic Studies, CESifo, vol. 50(3), pages 397-421.
  2. Bart van Ark & Robert Inklaar & Robert H. McGuckin, 2003. "ICT and Productivity in Europe and the United States Where Do the Differences Come From?," CESifo Economic Studies, CESifo, vol. 49(3), pages 295-318.
  3. Stephen D. Oliner & Daniel E. Sichel, 2002. "Information technology and productivity: where are we now and where are we going?," Economic Review, Federal Reserve Bank of Atlanta, issue Q3, pages 15-44.
  4. Stephen D. Oliner & Daniel E. Sichel, 2000. "The Resurgence of Growth in the Late 1990s: Is Information Technology the Story?," Journal of Economic Perspectives, American Economic Association, vol. 14(4), pages 3-22, Fall.
  5. D. S. Prasada Rao & Marcel P. Timmer, 2003. "Purchasing Power Parities for Industry Comparisons Using Weighted Elteto-Koves-Szulc (EKS) Methods," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 49(4), pages 491-511, December.
  6. Paul Schreyer, 2001. "The OECD Productivity Manual: A Guide to the Measurement of Industry-Level and Aggregate Productivity," International Productivity Monitor, Centre for the Study of Living Standards, vol. 2, pages 37-51, Spring.
  7. Dale W. Jorgenson & Kevin J. Stiroh, 2000. "Raising the Speed Limit: US Economic Growth in the Information Age," OECD Economics Department Working Papers 261, OECD Publishing.
  8. Robert J. Gordon, 2004. "Why was Europe Left at the Station When America's Productivity Locomotive Departed?," NBER Working Papers 10661, National Bureau of Economic Research, Inc.
  9. Nicoletti, Giuseppe & Scarpetta, Stefano, 2003. "Regulation, productivity, and growth : OECD evidence," Policy Research Working Paper Series 2944, The World Bank.
  10. Susanto Basu & John G. Fernald, 2006. "Information and communications technology as a general-purpose technology: evidence from U.S industry data," Working Paper Series 2006-29, Federal Reserve Bank of San Francisco.
  11. Erik Brynjolfsson & Lorin M. Hitt, 2003. "Computing Productivity: Firm-Level Evidence," The Review of Economics and Statistics, MIT Press, vol. 85(4), pages 793-808, November.
  12. Laurits R. Christensen & Dianne Cummings & Dale Jorgenson, 1980. "Economic Growth, 1947–73: An International Comparison," NBER Chapters, in: New Developments in Productivity Measurement, pages 595-698 National Bureau of Economic Research, Inc.
  13. Allen, Robert C & Diewert, W Erwin, 1981. "Direct versus Implicit Superlative Index Number Formulae," The Review of Economics and Statistics, MIT Press, vol. 63(3), pages 430-35, August.
  14. Theo Eicher & Oliver Röhn, 2007. "Sources of the German Productivity Demise – Tracing the Effects of Industry-Level ICT Investment," CESifo Working Paper Series 1896, CESifo Group Munich.
  15. Jorgenson, Dale W. & Kuroda, Masahiro & Nishimizu, Mieko, 1987. "Japan-U.S. industry-level productivity comparisons, 1960-1979," Journal of the Japanese and International Economies, Elsevier, vol. 1(1), pages 1-30, March.
  16. repec:dgr:rugggd:200576 is not listed on IDEAS
  17. Robert Inklaar & Mary O'Mahony & Marcel Timmer, 2005. "ICT AND EUROPE's PRODUCTIVITY PERFORMANCE: INDUSTRY-LEVEL GROWTH ACCOUNT COMPARISONS WITH THE UNITED STATES," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 51(4), pages 505-536, December.
  18. Dale W. Jorgenson & Mun S. Ho & Kevin J. Stiroh, 2005. "Productivity, Volume 3: Information Technology and the American Growth Resurgence," MIT Press Books, The MIT Press, edition 1, volume 3, number 0262101114, March.
  19. Robert J. Hill, 1999. "Comparing Price Levels across Countries Using Minimum-Spanning Trees," The Review of Economics and Statistics, MIT Press, vol. 81(1), pages 135-142, February.
  20. Someshwar Rao & Andrew Sharpe & Jeremy Smith, 2005. "An Analysis of the Labour Productivity Growth Slowdown in Canada since 2000," International Productivity Monitor, Centre for the Study of Living Standards, vol. 10, pages 3-23, Spring.
  21. Dirk Pilat, 1996. "Labour Productivity Levels in OECD Countries: Estimates for Manufacturing and Selected Service Sectors," OECD Economics Department Working Papers 169, OECD Publishing.
  22. Robert Inklaar & Marcel Timmer, 2007. "International Comparisons of Industry Output, Inputs and Productivity Levels: Methodology and New Results," Economic Systems Research, Taylor & Francis Journals, vol. 19(3), pages 343-363.
  23. Hill, Robert & Timmer, Marcel, 2004. "Standard errors as weights in multilateral price indices," GGDC Research Memorandum 200473, Groningen Growth and Development Centre, University of Groningen.
  24. van Ark, Bart, 1998. "Productivity," Journal of the Japanese and International Economies, Elsevier, vol. 12(2), pages 171-174, June.
  25. Robert J. Gordon, 2003. "Exploding Productivity Growth: Context, Causes, and Implications," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 34(2), pages 207-298.
  26. Mary O'Mahony & Michela Vecchi, 2005. "Quantifying the Impact of ICT Capital on Output Growth: A Heterogeneous Dynamic Panel Approach," Economica, London School of Economics and Political Science, vol. 72(288), pages 615-633, November.
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