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Explaining Economic Growth: Factor Accumulation, Total Factor Productivity Growth, and Production Efficiency Improvement

Author

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  • Yasmina Reem Limam

    (COMETE-Engineering, Tunis)

  • Stephen M. Miller

    (University of Nevada, Las Vegas, and University of Connecticut)

Abstract

This paper examines cross-country patterns of economic growth by estimating a stochastic frontier production function for 80 developed and developing countries and decomposing output change into factor accumulation, total factor productivity growth, and production efficiency improvement. In addition, this paper incorporates the quality of inputs in analyzing output growth, where the productivity of capital depends on its average age, while the productivity of labor depends on its average level of education. Our growth decomposition involves five geographic regions - Africa, East Asian, Latin America, South Asia, and the West. Factor growth, especially capital accumulation, generally proves much more important than either the improved quality of factors or total factor productivity growth in explaining output growth. The quality of capital positively and significantly affects output growth in all groups. The quality of labor, however, only possesses a positive and significant effect on output growth in Africa, East Asia, and the West. Labor quality owns a negative and significant effect in Latin America and South Asia.

Suggested Citation

  • Yasmina Reem Limam & Stephen M. Miller, 2004. "Explaining Economic Growth: Factor Accumulation, Total Factor Productivity Growth, and Production Efficiency Improvement," Working papers 2004-20, University of Connecticut, Department of Economics.
  • Handle: RePEc:uct:uconnp:2004-20
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    References listed on IDEAS

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    Cited by:

    1. Khalafalla Ahmed Mohamed Arabi & Suliman Zakaria Suliman Abdalla, 2013. "The Impact of Human Capital on Economic Growth: Empirical Evidence from Sudan," Research in World Economy, Research in World Economy, Sciedu Press, vol. 4(2), pages 43-53, September.
    2. Subal Kumbhakar & Raquel Ortega-Argilés & Lesley Potters & Marco Vivarelli & Peter Voigt, 2012. "Corporate R&D and firm efficiency: evidence from Europe’s top R&D investors," Journal of Productivity Analysis, Springer, vol. 37(2), pages 125-140, April.
    3. Nkamleu, Guy Blaise & Sylla, Kalilou & Zonon, Abdoulaye, 2008. "What accounts for growth in African agriculture," MPRA Paper 11102, University Library of Munich, Germany, revised 2008.
    4. Marco G. Ercolani & Zheng Wei, 2010. "An Empirical Analysis of the Lewis-Ranis-FEi Theory of Dualistic Economic Development for China," Discussion Papers 10-06, Department of Economics, University of Birmingham.
    5. Bos, J.W.B. & Economidou, C. & Koetter, M. & Kolari, J.W., 2010. "Do all countries grow alike?," Journal of Development Economics, Elsevier, vol. 91(1), pages 113-127, January.
    6. Nkamleu, Guy Blaise, 2008. "Investigating the Sources of Agricultural Growth in Africa: Factor Accumulation, Total Factor Productivity, and Technology Absorption," 2007 Second International Conference, August 20-22, 2007, Accra, Ghana 52108, African Association of Agricultural Economists (AAAE).

    More about this item

    Keywords

    Productivity; Efficiency; Growth Accounting;

    JEL classification:

    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence

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