IDEAS home Printed from https://ideas.repec.org/p/ost/wpaper/307.html
   My bibliography  Save this paper

Converging Wages, Diverging GRP: Directed Technical Change and Endogenous Growth. Empirical Analysis of Growth Patterns across Kazakh regions

Author

Listed:
  • Alisher Aldashev

    (Osteuropa-Institut, Regensburg (Institut for East European Studies))

Abstract

The paper analyzes unequal regional development in Kazakhstan. Applying the nonlinear least squares method in presence of spatial correlation we estimate the convergence rate of wages across Kazakh regions for the period 2003–2009. The estimated convergence rate is about 3% which is somewhat higher than estimates obtained for the USA and Europe. At the same time there is slight divergence in the GRP per capita. It is argued that convergence in wages which coincides with divergence in the per capita GRP is consistent with the endogenous growth model where profit maximizing firms choose the capital intensity of the technology. This implies that the inequality between regions will only exacerbate and the central government may wish to invest more in low-growth regions to alleviate disproportional development.

Suggested Citation

  • Alisher Aldashev, 2011. "Converging Wages, Diverging GRP: Directed Technical Change and Endogenous Growth. Empirical Analysis of Growth Patterns across Kazakh regions," Working Papers 307, Leibniz Institut für Ost- und Südosteuropaforschung (Institute for East and Southeast European Studies).
  • Handle: RePEc:ost:wpaper:307
    as

    Download full text from publisher

    File URL: http://www.oei-dokumente.de/publikationen/wp/wp-307.pdf
    Download Restriction: no

    References listed on IDEAS

    as
    1. Dollar, David & Kraay, Aart, 2002. "Growth Is Good for the Poor," Journal of Economic Growth, Springer, vol. 7(3), pages 195-225, September.
    2. King, Robert G & Rebelo, Sergio T, 1993. "Transitional Dynamics and Economic Growth in the Neoclassical Model," American Economic Review, American Economic Association, pages 908-931.
    3. Laura Solanko, 2003. "An empirical note on growth and convergence across Russian regions," Macroeconomics 0308005, EconWPA.
    4. Davidson, Russell & MacKinnon, James G., 1993. "Estimation and Inference in Econometrics," OUP Catalogue, Oxford University Press, number 9780195060119.
    5. N. Gregory Mankiw & David Romer & David N. Weil, 1992. "A Contribution to the Empirics of Economic Growth," The Quarterly Journal of Economics, Oxford University Press, vol. 107(2), pages 407-437.
    6. Enrico Marelli & Marcello Signorelli, 2010. "Transition, Regional Features, Growth and Labour Market Dynamics," AIEL Series in Labour Economics,in: Floro Ernesto Caroleo & Francesco Pastore (ed.), The Labour Market Impact of the EU Enlargement. A New Regional Geography of Europe?, edition 1, chapter 5, pages 99-147 AIEL - Associazione Italiana Economisti del Lavoro.
    7. John C. Driscoll & Aart C. Kraay, 1998. "Consistent Covariance Matrix Estimation With Spatially Dependent Panel Data," The Review of Economics and Statistics, MIT Press, vol. 80(4), pages 549-560, November.
    8. Peter Huber, 2007. "Regional Labour Market Developments in Transition: A Survey of the Empirical Literature," European Journal of Comparative Economics, Cattaneo University (LIUC), vol. 4(2), pages 263-298, September.
    9. Hernando Zuleta, 2008. "Factor Saving Innovations and Factor Income Shares," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 11(4), pages 836-851, October.
    10. Alisher Aldashev, 2012. "Occupational and Locational Substitution: Measuring the Effect of Occupational and Regional Mobility," LABOUR, CEIS, vol. 26(1), pages 108-123, March.
    11. Miriam Frey & Carmen Wieslhuber, 2011. "Do Kazakh Regions Converge?," Memoranda - Policy Papers 52, Institut für Ost- und Südosteuropaforschung (Institute for East and Southeast European Studies).
    12. Pietro Peretto & John J. Seater, 2006. "Augmentation or Elimination?," DEGIT Conference Papers c011_060, DEGIT, Dynamics, Economic Growth, and International Trade.
    13. Daniel Hoechle, 2007. "Robust standard errors for panel regressions with cross-sectional dependence," Stata Journal, StataCorp LP, vol. 7(3), pages 281-312, September.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    convergence; endogenous growth; Kazakhstan; capital intensive technology; nonlinear least squares; spatial correlation;

    JEL classification:

    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • P25 - Economic Systems - - Socialist Systems and Transition Economies - - - Urban, Rural, and Regional Economics
    • P23 - Economic Systems - - Socialist Systems and Transition Economies - - - Factor and Product Markets; Industry Studies; Population

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ost:wpaper:307. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Kseniia Gatskova). General contact details of provider: http://edirc.repec.org/data/osteide.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.