IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Login to save this paper or follow this series

Kaldor-Verdoorn’s law and increasing returns to scale: a comparison across developed countries

  • Ofria, Ferdinando
  • Millemaci, Emanuele

The object of this study is to investigate the validity of the Kaldor-Verdoorn’s Law in explaining the long run determinants of the labor productivity growth for the manufacturing sector of some developed economies (Western European Countries, Australia, Canada, Japan and United States). We consider the period 1973-2006 using data provided by the European Commission - Economics and Financial Affairs. Our findings suggest that the law is valid for the manufacturing of Italy, US, Belgium and Australia. Capital growth and labor cost growth do not appear relevant in explaining productivity growth. The estimated Verdoorn coefficients are found to be stable throughout the period.

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL: http://mpra.ub.uni-muenchen.de/30941/1/MPRA_paper_30941.pdf
File Function: original version
Download Restriction: no

Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 30941.

as
in new window

Length:
Date of creation: 23 Oct 2010
Date of revision:
Handle: RePEc:pra:mprapa:30941
Contact details of provider: Postal: Schackstr. 4, D-80539 Munich, Germany
Phone: +49-(0)89-2180-2219
Fax: +49-(0)89-2180-3900
Web page: http://mpra.ub.uni-muenchen.de

More information through EDIRC

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

as in new window
  1. Douglas Staiger & James H. Stock, 1994. "Instrumental Variables Regression with Weak Instruments," NBER Technical Working Papers 0151, National Bureau of Economic Research, Inc.
  2. Romer, Paul M, 1986. "Increasing Returns and Long-run Growth," Journal of Political Economy, University of Chicago Press, vol. 94(5), pages 1002-37, October.
  3. Targetti, Ferdinando & Foti, Alessandro, 1997. "Growth and Productivity: A Model of Cumulative Growth and Catching Up," Cambridge Journal of Economics, Oxford University Press, vol. 21(1), pages 27-43, January.
  4. Russell Davidson & James MacKinnon, 2006. "The Case Against Jive," Departmental Working Papers 2004-02, McGill University, Department of Economics.
  5. Ferdinando Ofria, 2009. "L'approccio Kaldor-Verdoorn: una verifica empirica per il Centro-Nord e il Mezzogiorno d'Italia (anni 1951-2006)," Rivista di Politica Economica, SIPI Spa, issue 1, pages 179-207, January-M.
  6. Finn, Mary G, 2000. "Perfect Competition and the Effects of Energy Price Increases on Economic Activity," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 32(3), pages 400-416, August.
  7. Joshua D. Angrist & Alan B. Krueger, 2001. "Instrumental Variables and the Search for Identification: From Supply and Demand to Natural Experiments," Journal of Economic Perspectives, American Economic Association, vol. 15(4), pages 69-85, Fall.
  8. Rowthorn, R E, 1975. "A Reply to Lord Kaldor's Comment," Economic Journal, Royal Economic Society, vol. 85(340), pages 897-901, December.
  9. Aghion, P. & Howitt, P., 1990. "A Model Of Growth Through Creative Destruction," DELTA Working Papers 90-12, DELTA (Ecole normale supérieure).
  10. Lucas, Robert Jr., 1988. "On the mechanics of economic development," Journal of Monetary Economics, Elsevier, vol. 22(1), pages 3-42, July.
  11. Vaciago, Giacomo, 1975. "Increasing Returns and Growth in Advanced Economies: A Re-evaluation," Oxford Economic Papers, Oxford University Press, vol. 27(2), pages 232-39, July.
  12. R. I. D. Harris & A. Liu, 1999. "Verdoorn's law and increasing returns to scale: country estimates based on the cointegration approach," Applied Economics Letters, Taylor & Francis Journals, vol. 6(1), pages 29-33.
  13. Romina Gambacorta, 2004. "Il dibattito sulla legge di Verdoorn: alcuni risultati empirici usando l’analisi di cointegrazione," Rivista di Politica Economica, SIPI Spa, vol. 94(3), pages 251-, May-June.
  14. Lena Vogel, 2007. "The Endogeneity of the Natural Rate of Growth – an Empirical Study for Latin-American Countries," Macroeconomics and Finance Series 200704, Hamburg University, Department Wirtschaft und Politik.
  15. Paul M Romer, 1999. "Endogenous Technological Change," Levine's Working Paper Archive 2135, David K. Levine.
  16. Alvin Y. So, 2002. "Guest Editor's Introduction," Chinese Economy, M.E. Sharpe, Inc., vol. 35(3), pages 3-25, May.
  17. Aghion, Philippe & Howitt, Peter, 1992. "A Model of Growth Through Creative Destruction," Scholarly Articles 12490578, Harvard University Department of Economics.
  18. Dirk Frantzen, 2008. "Technology, competitiveness and specialisation in OECD manufacturing," Journal of Economic Studies, Emerald Group Publishing, vol. 35(1), pages 44-68, March.
  19. Marin, Dalia, 1992. "Is the Export-Led.Growth Hypothesis Valid for Industrialized Countries?," The Review of Economics and Statistics, MIT Press, vol. 74(4), pages 678-88, November.
  20. McCombie, J S L & de Ridder, J R, 1984. ""The Verdoorn Law Controversy": Some New Empirical Evidence Using U.S. State Data," Oxford Economic Papers, Oxford University Press, vol. 36(2), pages 268-84, June.
  21. Christos Pitelis & Nicholas Antonakis, 2003. "Manufacturing and competitiveness: the case of Greece," Journal of Economic Studies, Emerald Group Publishing, vol. 30(5), pages 535-547, October.
  22. Kaldor, Nicholas, 1975. "Economic Growth and the Verdoorn Law-A Comment on Mr. Rowthorn's Article," Economic Journal, Royal Economic Society, vol. 85(340), pages 891-96, December.
  23. Maddison, Angus, 1979. "Per Capita Output in the Long Run," Kyklos, Wiley Blackwell, vol. 32(1/2), pages 412-29.
  24. Salvatore D'Acunto & Sergio Destefanis & Marco Musella, 2004. "Exports, Supply Constraints and Growth: An Investigation using Regional Data," International Review of Applied Economics, Taylor & Francis Journals, vol. 18(2), pages 167-189.
  25. S.M. Thangavelu & David T. Owyong, 2003. "The impact of export growth and scale economies on productivity in Singapore's manufacturing industries," Journal of Economic Studies, Emerald Group Publishing, vol. 30(6), pages 623-635, October.
  26. Destefanis, Sergio, 2002. "The Verdoorn Law: Some Evidence from Non-parametric Frontier Analysis," MPRA Paper 60954, University Library of Munich, Germany.
  27. Fingleton, B & McCombie, J S L, 1998. "Increasing Returns and Economic Growth: Some Evidence for Manufacturing from the European Union Regions," Oxford Economic Papers, Oxford University Press, vol. 50(1), pages 89-105, January.
  28. Young, Allyn A., 1928. "Increasing Returns and Economic Progress," History of Economic Thought Articles, McMaster University Archive for the History of Economic Thought, vol. 38, pages 527-542.
  29. James H. Stock & Motohiro Yogo, 2002. "Testing for Weak Instruments in Linear IV Regression," NBER Technical Working Papers 0284, National Bureau of Economic Research, Inc.
  30. John S. L. McCombie & Mark Roberts, 2007. "Returns To Scale And Regional Growth: The Static-Dynamic Verdoorn Law Paradox Revisited," Journal of Regional Science, Wiley Blackwell, vol. 47(2), pages 179-208, 05.
  31. Harris, Richard I D & Lau, Eunice, 1998. "Verdoorn's Law and Increasing Returns to Scale in the UK Regions, 1968-91: Some New Estimates Based on the Cointegration Approach," Oxford Economic Papers, Oxford University Press, vol. 50(2), pages 201-19, April.
  32. Anderson, T W & Kunitomo, Naoto & Sawa, Takamitsu, 1982. "Evaluation of the Distribution Function of the Limited Information Maximum Likelihood Estimator," Econometrica, Econometric Society, vol. 50(4), pages 1009-27, July.
  33. Fiona Tregenna, 2009. "Characterising deindustrialisation: An analysis of changes in manufacturing employment and output internationally," Cambridge Journal of Economics, Oxford University Press, vol. 33(3), pages 433-466, May.
  34. Stock, James H & Wright, Jonathan H & Yogo, Motohiro, 2002. "A Survey of Weak Instruments and Weak Identification in Generalized Method of Moments," Journal of Business & Economic Statistics, American Statistical Association, vol. 20(4), pages 518-29, October.
  35. Ute Pieper, 2003. "Sectoral regularities of productivity growth in developing countries--a Kaldorian interpretation," Cambridge Journal of Economics, Oxford University Press, vol. 27(6), pages 831-850, November.
  36. Alvaro Angeriz & John McCombie & Mark Roberts, 2008. "New Estimates of Returns to Scale and Spatial Spillovers for EU Regional Manufacturing, 1986—2002," International Regional Science Review, , vol. 31(1), pages 62-87, January.
  37. Anna Mikusheva & Brian P. Poi, 2006. "Tests and confidence sets with correct size when instruments are potentially weak," Stata Journal, StataCorp LP, vol. 6(3), pages 335-347, September.
  38. Stilianos Alexiadis & Dimitrios Tsagdis, 2010. "Is cumulative growth in manufacturing productivity slowing down in the EU12 regions?," Cambridge Journal of Economics, Oxford University Press, vol. 34(6), pages 1001-1017.
Full references (including those not matched with items on IDEAS)

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:30941. 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: (Ekkehart Schlicht)

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 references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link 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 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.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.