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Explaining cross-country differences in productivity: is it efficiency or factor endowments?

Gerba, Eddie and Pikoulakis, Emmanuel V. (2013) Explaining cross-country differences in productivity: is it efficiency or factor endowments? Working papers. Social Science Research Network (SSRN), Rochester, USA.

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Abstract

In this paper we develop a two-sector growth model of optimizing agents and apply this model to the data for the purpose of addressing the two interrelated questions that preoccupy the literature on development and growth accounting, namely: (1) What determines sustained growth and (2) What explains the vast cross-country differences in labor productivity. Concerning the first questions our findings support the view that to some extend the growth in effective human capital is a by-product of learning-by-doing. On the second question we find that differences in factors of production explain twice as much of the difference in labor productivity between developed and developing countries than differences in efficiency.

Item Type: Monograph (Working Paper)
Official URL: http://www.ssrn.com/
Additional Information: © 2013 The Authors
Divisions: European Institute
Subjects: H Social Sciences > HC Economic History and Conditions
JEL classification: J - Labor and Demographic Economics > J2 - Time Allocation, Work Behavior, and Employment Determination and Creation; Human Capital; Retirement > J24 - Human Capital; Skills; Occupational Choice; Labor Productivity
O - Economic Development, Technological Change, and Growth > O4 - Economic Growth and Aggregate Productivity > O41 - One, Two, and Multisector Growth Models
O - Economic Development, Technological Change, and Growth > O4 - Economic Growth and Aggregate Productivity > O47 - Measurement of Economic Growth; Aggregate Productivity; Cross-Country Output (Income) Convergence
Sets: Departments > European Institute
Collections > Economists Online
Date Deposited: 04 Apr 2014 13:25
Last Modified: 18 Sep 2019 23:22
URI: http://eprints.lse.ac.uk/id/eprint/56399

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