A Versus K Revisited: Evidence from Selected MENA Countries

Aamer S. Abu-Qarn () and Suleiman Abu-Bader ()

No 205, Working Papers from Ben-Gurion University of the Negev, Department of Economics

Abstract: This paper reconsiders the A versus K debate, namely, which factor is the leading contributor to economic growth? productivity gains (A) or factor accumulation (K). The growth accounting analysis is conducted for ten Middle Eastern and North African (MENA) countries over the period 1960-1998. The long-run share of capital in national income is estimated using cointegration (country-specific) and panel data (region-specific) methods. We find that for most of the countries in our sample the share of capital is much higher than the conventional share of 0.3-0.4. The growth accounting exercise conducted with the incorporation of human capital reveals that for the MENA region the contribution of productivity gains to economic growth is negligible and frequently even detrimental. Thus, we conclude that it is factor (both physical and human) accumulation that drives the economic performance of MENA economies.

Keywords: Growth Accounting; Productivity and Factor Accumulation; MENA; Middle-East; Cointegration; Panel Data (search for similar items in EconPapers)
JEL-codes: O47 O53 C22 C23 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-dev and nep-hrm
Date: 2005-07

Forthcoming in World Development

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http://www.econ.bgu.ac.il/papers/205.pdf First version, 2005 (application/pdf)

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Working Paper: A Versus K Revisited: Evidence from Selected MENA Countries (2005)
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