Explaining Economic Growth: Factor Accumulation, Total Factor Productivity Growth, and Production Efficiency Improvement

Yasmina Reem Limam and Stephen Miller
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Yasmina Reem Limam: COMETE-Engineering, Tunis

No 2004-20, Working papers from University of Connecticut, Department of Economics

Abstract: This paper examines cross-country patterns of economic growth by estimating a stochastic frontier production function for 80 developed and developing countries and decomposing output change into factor accumulation, total factor productivity growth, and production efficiency improvement. In addition, this paper incorporates the quality of inputs in analyzing output growth, where the productivity of capital depends on its average age, while the productivity of labor depends on its average level of education. Our growth decomposition involves five geographic regions - Africa, East Asian, Latin America, South Asia, and the West. Factor growth, especially capital accumulation, generally proves much more important than either the improved quality of factors or total factor productivity growth in explaining output growth. The quality of capital positively and significantly affects output growth in all groups. The quality of labor, however, only possesses a positive and significant effect on output growth in Africa, East Asia, and the West. Labor quality owns a negative and significant effect in Latin America and South Asia.

Keywords: Productivity; Efficiency; Growth Accounting (search for similar items in EconPapers)
JEL-codes: F43 O47 (search for similar items in EconPapers)
Pages: 42 pages
Date: 2004-03
New Economics Papers: this item is included in nep-dev
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Citations: View citations in EconPapers (27)

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Persistent link: https://EconPapers.repec.org/RePEc:uct:uconnp:2004-20

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