Productivity Growth and Convergence: Revisiting Kumar and Russell (2002)

Kelly D.T.Trinh and Valentin Zelenyuk
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Kelly D.T.Trinh: School of Economics, The University of Queensland, https://economics.uq.edu.au/

No WP112015, CEPA Working Papers Series from University of Queensland, School of Economics

Abstract: In this paper, we first investigate the replicability of the seminal work of Kumar and Russell (The American Economic Review, 2002) on productivity growth and convergence. We then compare Kumar and Russell’s results with estimates obtained using alternative approaches that allow for statistical noise (e.g., measurement error) in the data. When statistical noise is accounted for, some of the conclusions found in their study are confirmed and some are not. In particular, capital deepening still remains as the key factor driving the transformation of the distribution of labor productivity from a unimodal distribution into a bimodal distribution with a higher mean. However, we cannot confirm that capital deepening contributes to world convergence. We find instead statistical evidence that indicates efficiency change is a key driver of world convergence.

Keywords: DEA; Stochastic DEA; Local Likelihood Estimator; Productivity Growth; Convergence (search for similar items in EconPapers)
JEL-codes: C14 C44 D24 O47 (search for similar items in EconPapers)
Date: 2015-12
New Economics Papers: this item is included in nep-eff
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Persistent link: https://EconPapers.repec.org/RePEc:qld:uqcepa:109

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