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Are capital shares higher in poor countries? Evidence from Industrial Surveys

  • Francisco Rodríguez

    ()

    (Economics Department, Wesleyan University)

  • Daniel Ortega

    ()

    (Center for Finance, Instituto de Estudios Superiores de Administración)

This paper presents new evidence on the cross-country correlation between factor shares and per capita income. The evidence comes from UNIDO and OECD databases of industrial surveys designed to measure economic activity in the corporate manufacturing sector. We show that a statistically significant negative correlation is present in both data sets. The correlation is robust to controlling for methodological variations in the valuation, concept and definition of value added and labor income. It is also present within 3 and 4-digit industries. We argue that previous evidence on capital shares derived from national accounts statistics is consistent with the negative relation that we find on the industrial survey data.

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File URL: http://repec.wesleyan.edu/pdf/frrodriguez/2006023_rodriguez.pdf
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Paper provided by Wesleyan University, Department of Economics in its series Wesleyan Economics Working Papers with number 2006-023.

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Length: 40 pages
Date of creation: Sep 2006
Date of revision:
Handle: RePEc:wes:weswpa:2006-023
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  2. Douglas Gollin, 2002. "Getting Income Shares Right," Journal of Political Economy, University of Chicago Press, vol. 110(2), pages 458-474, April.
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  6. Caselli, Francesco & Feyrer, James, 2005. "The Marginal Product of Capital," CEPR Discussion Papers 5203, C.E.P.R. Discussion Papers.
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  8. Samuel Bentolila & Gilles Saint Paul, 1999. "Explaining movements in the labor share," Economics Working Papers 374, Department of Economics and Business, Universitat Pompeu Fabra.
  9. Dani Rodrik, 1998. "Democracies Pay Higher Wages," NBER Working Papers 6364, National Bureau of Economic Research, Inc.
  10. Eric Bartelsman & John Haltiwanger & Stefano Scarpetta, 2009. "Measuring and Analyzing Cross-country Differences in Firm Dynamics," NBER Chapters, in: Producer Dynamics: New Evidence from Micro Data, pages 15-76 National Bureau of Economic Research, Inc.
  11. Francesco Caselli, 2004. "Accounting for Cross-Country Income Differences," NBER Working Papers 10828, National Bureau of Economic Research, Inc.
  12. Stephen L. Parente & Edward C. Prescott, 2002. "Barriers to Riches," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262661306, June.
  13. James Heckman & Carmen Pages, 2003. "Law and Employment: Lessons from Latin America and the Caribbean," NBER Working Papers 10129, National Bureau of Economic Research, Inc.
  14. Jean Imbs & Romain Wacziarg, 2003. "Stages of Diversification," American Economic Review, American Economic Association, vol. 93(1), pages 63-86, March.
  15. Francesco Caselli, 2005. "Accounting for cross-country income differences," LSE Research Online Documents on Economics 3567, London School of Economics and Political Science, LSE Library.
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