Technology frontier, labor productivity and economic growth: Evidence from OECD countries

Azomahou, Théophile T., Diene, Bity and Diene, Mbaye (2009). Technology frontier, labor productivity and economic growth: Evidence from OECD countries. UNU-MERIT.

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  • Author Azomahou, Théophile T.
    Diene, Bity
    Diene, Mbaye
    Title Technology frontier, labor productivity and economic growth: Evidence from OECD countries
    Publication Date 2009
    Publisher UNU-MERIT
    Abstract We use 29 OECD countries data spanning over 1960-2000 to study the growth strategy when countries are close to the technology frontier. Relying on a semi-parametric generalized additive model, we estimate labor productivity equations. We find that the number of agents enrolled in higher education is a determinant of growth. Moreover, when a country is sufficiently near the technology frontier thanks to an increasing R&D expenditure, it becomes optimal to invest in fundamental research, since after a short period of efficiency, business R&D can no longer ensure the transition toward the technology frontier, while higher education presents the opposite shape. These findings support the main assertion of Aghion and Cohen (2004) that countries which are near the technology frontier have to invest in higher education while those far away from the frontier make their technology level growing up by investing in primary and secondary schooling.
    UNU Topics of Focus Education
    Keyword Education
    R&D
    Labor productivity
    Economic growth
    JEL I23
    J24
    O40
    Copyright Holder UNU-MERIT
    Copyright Year 2009
    ISSN 1871-9872
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    Created: Wed, 11 Dec 2013, 16:15:32 JST