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The Sun Also Rises: Productivity Convergence Between Japan and the USA

  • Gavin Cameron

The growth process for a technological leader is different from that of a follower. While followers can grow through imitation and capital deepening, a leader must undertake original research. This suggests that as the gap between the leader and the follower narrows, the follower must undertake more formal R&D and possibly face a slower overall growth rate. This paper constructs measures of relative total factor productivity for eleven Japanese manufacturing industries and uses dynamic panel data methods to test whether a smaller productivity gap leads to slower growth, and whether R&D takes over as the engine of growth as Japan approaches the technological frontier. The results suggest that Japanese and US productivity have been growing at similar rates since the mid-1970s, and that some of the Japanese growth slowdown is attributable to the exhaustion of imitation possibilities.

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Paper provided by University of Oxford, Department of Economics in its series Economics Series Working Papers with number 45.

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Date of creation: 01 Dec 2000
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Handle: RePEc:oxf:wpaper:45
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