Nonlinearities in productivity growth: A semi-parametric panel analysis

Azomahou, Théophile T., Diene, Bity and Diene, Mbaye (2012). Nonlinearities in productivity growth: A semi-parametric panel analysis. UNU-MERIT.

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  • Author Azomahou, Théophile T.
    Diene, Bity
    Diene, Mbaye
    Title Nonlinearities in productivity growth: A semi-parametric panel analysis
    Publication Date 2012
    Publisher UNU-MERIT
    Abstract We use country panel data spanning over 1998-2008 for both developed and developing countries to study the productivity growth when countries are close to the technology frontier. Relying on a semi-parametric generalized additive model, we estimate both reduced and structural forms for total factor productivity growth. We consider three measurements of frontier: the economy with the highest level of productivity growth, the world productivity growth and the productivity growth of the USA. We obtain a U-shape relation between productivity growth and the proximity to the world productivity growth. The relation between productivity growth and human capital displays an inverted U-shape form (res. U-shape) when the proximity to the highest productivity growth is used (res. the proximity to productivity growth of USA). Total staff in R&D has an inverted W-shape effect on productivity growth. The share of R&D expenditure funded by government and from abroad impact positively the growth of productivity. However, the increase in government spending on R&D has a greater impact on productivity growth when the former is weak, and a smaller impact when R&D spending is already high. International trade has a positive effect on productivity growth. Specification tests show that our semi-parametric models provide a better approximation of the data compared to the parametric analogue, revealing a high degree of nonlinearity governing productivity growth.
    Keyword R&D
    TFP
    Panel data
    Nonparametric estimation
    Reduced vs. structural form
    JEL C14
    I23
    O3
    O4
    Copyright Holder UNU-MERIT
    Copyright Year 2012
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    Created: Wed, 11 Dec 2013, 17:06:13 JST