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

Théophile T. Azomahou, Bity Diene and Mbaye Diene ()
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Mbaye Diene: CREA, University of Luxembourg

DEM Discussion Paper Series from Department of Economics at the University of Luxembourg

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.

JEL-codes: I23 J24 O40 (search for similar items in EconPapers)
Date: 2009
New Economics Papers: this item is included in nep-eff, nep-ino and nep-lab
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Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:luc:wpaper:09-19

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