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

Theophile Azomahou (), Bity Diene and Mbaye Diene
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Theophile Azomahou: UNU-MERIT
Bity Diene: CREA, University of Luxembourg
Mbaye Diene: CRES, Universite Cheikh Anta Diop

No 2009-059, MERIT Working Papers from United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (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.

Keywords: Education; R&D; Labor Productivity; Economic Growth (search for similar items in EconPapers)
JEL-codes: I23 J24 O40 (search for similar items in EconPapers)
Date: 2009
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Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:unm:unumer:2009059

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