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Comovement and catch-up in productivity across sectors: Evidence from the OECD

Listed author(s):
  • Cornwell, Christopher Mark
  • Wächter, Jens-Uwe

A method for analyzing productivity convergence based on frontier production functions is proposed. It is examined whether departures from the frontier|country{level inefficiencies|exhibit long{run relationships and convergence. The method is applied to 1-digit industries of 14 OECD countries from 1970{90. Results suggests that comovements in efficiency are concentrated between the EU{countries. Catch{up is found in all but one sector. Even manufacturing, which previous studies have found not to display convergence, shows signs of catch-up. It is examined whether departures from the frontier|country{level inefficiencies|exhibit long{run relationships and convergence. The method is applied to 1-digit industries of 14 OECD countries from 1970{90. Results suggests that comovements in efficiency are concentrated between the EU{countries. Catch{up is found in all but one sector. Even manufacturing, which previous studies have found not to display convergence, shows signs of catch{up.

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Paper provided by University of Bonn, ZEI - Center for European Integration Studies in its series ZEI Working Papers with number B 07-1999.

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Date of creation: 1999
Handle: RePEc:zbw:zeiwps:b071999
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  1. Engle, Robert & Granger, Clive, 2015. "Co-integration and error correction: Representation, estimation, and testing," Applied Econometrics, Publishing House "SINERGIA PRESS", vol. 39(3), pages 106-135.
  2. Bernard, Andrew B & Jones, Charles I, 1996. "Productivity across Industries and Countries: Time Series Theory and Evidence," The Review of Economics and Statistics, MIT Press, vol. 78(1), pages 135-146, February.
  3. Robert J. Barro, 1991. "Economic Growth in a Cross Section of Countries," The Quarterly Journal of Economics, Oxford University Press, vol. 106(2), pages 407-443.
  4. Quah, Danny T, 1996. "Twin Peaks: Growth and Convergence in Models of Distribution Dynamics," Economic Journal, Royal Economic Society, vol. 106(437), pages 1045-1055, July.
  5. Kwiatkowski, Denis & Phillips, Peter C. B. & Schmidt, Peter & Shin, Yongcheol, 1992. "Testing the null hypothesis of stationarity against the alternative of a unit root : How sure are we that economic time series have a unit root?," Journal of Econometrics, Elsevier, vol. 54(1-3), pages 159-178.
  6. Cornwell, Christopher Mark & Wächter, Jens-Uwe, 1999. "Productivity convergence and economic growth: A frontier production function approach," ZEI Working Papers B 06-1999, University of Bonn, ZEI - Center for European Integration Studies.
  7. Oulton,Nicholas & O'Mahony,Mary, 1994. "Productivity and Growth," Cambridge Books, Cambridge University Press, number 9780521453455, Diciembre.
  8. F. J. M. Meyer-zu-Schlochtern, 1988. "An International Sectoral Data Base for Thirteen OECD Countries," OECD Economics Department Working Papers 57, OECD Publishing.
  9. Osterwald-Lenum, Michael, 1992. "A Note with Quantiles of the Asymptotic Distribution of the Maximum Likelihood Cointegration Rank Test Statistics," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 54(3), pages 461-472, August.
  10. Quah, Danny, 1993. " Galton's Fallacy and Tests of the Convergence Hypothesis," Scandinavian Journal of Economics, Wiley Blackwell, vol. 95(4), pages 427-443, December.
  11. Bernard, Andrew B & Jones, Charles I, 1996. "Comparing Apples to Oranges: Productivity Convergence and Measurement across Industries and Countries," American Economic Review, American Economic Association, vol. 86(5), pages 1216-1238, December.
  12. Johansen, Soren, 1991. "Estimation and Hypothesis Testing of Cointegration Vectors in Gaussian Vector Autoregressive Models," Econometrica, Econometric Society, vol. 59(6), pages 1551-1580, November.
  13. Danny Quah, 1996. "Twin Peaks: Growth and Convergence in Models of Distribution Dynamics," CEP Discussion Papers dp0280, Centre for Economic Performance, LSE.
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