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On the long run determinants of industry TFP growth rates

Ngai, L. Rachel and Samaniego, Roberto M. (2007) On the long run determinants of industry TFP growth rates. 6408. Centre for Economic Policy Research, London, UK. (Unpublished)

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Identification Number: 6408

Abstract

We develop a multi-sector general equilibrium model in which productivity growth is driven by the generation of knowledge. In the model, firms allocate resources towards the production of goods and the production of new knowledge, in response to industry-specific factors of demand and technology. In equilibrium, we find that long run differences in research intensity and productivity growth are primarily driven by the parameters of the production function for knowledge -- particularly the extent to which the production of new knowledge benefits from prior knowledge, which we term receptivity. Conditional on receptivity, whether the production of knowledge relies on prior knowledge that is internally generated by the firm or whether it instead "spills over" from its competitors does not appear to be quantitatively important. The results are consistent with a number of empirical findings on the relationship between research intensity and rates of technical change.

Item Type: Monograph (Discussion Paper)
Official URL: http://www.cepr.org
Additional Information: © 2007 L. R. Ngai and R. M. Samaniego
Subjects: H Social Sciences > HB Economic Theory
Sets: Collections > Economists Online
Research centres and groups > Centre for Economic Performance (CEP)
Departments > Economics
Date Deposited: 27 Feb 2008
Last Modified: 01 Oct 2010 08:50
URI: http://eprints.lse.ac.uk/id/eprint/3547

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