Institutions and Cultural Heterogeneity as Determinants of National Income: A Random-coefficients Stochastic Frontier Model
Maria Baquero Forero,
Takanori Ida and
Authors registered in the RePEc Author Service: 黒田敏史 ()
Review of Development Economics, 2015, vol. 19, issue 3, 710-724
Previous research on total factor productivity (TFP) shows that cross-country differences in income cannot be fully explained by stocks of capital (K), labor (L) and human capital (E). In addition, the omission of major production inputs or the use of proxies to estimate unobservable inputs leads to biased estimation results. This study addresses the above issues by employing a novel econometric approach and provides empirical evidence that a fixed production input, and therefore a country's income, is positively correlated with the existence of British-style institutions and negatively correlated with cultural heterogeneity and Spanish-style institutions. Our methodology is twofold. First, using data for 62 countries from 1980 to 2004, we regressed a random-coefficients stochastic production frontier that allows estimating a fixed unobservable production input without using proxies. Second, the estimated fixed production input is shown to be related to colonial institutions and cultural heterogeneity by means of ordinary least squares and feasible generalized least squares regressions.
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed
Downloads: (external link)
Access to full text is restricted to subscribers.
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:bla:rdevec:v:19:y:2015:i:3:p:710-724
Ordering information: This journal article can be ordered from
http://www.blackwell ... bs.asp?ref=1363-6669
Access Statistics for this article
Review of Development Economics is currently edited by E. Kwan Choi
More articles in Review of Development Economics from Wiley Blackwell
Bibliographic data for series maintained by Wiley Content Delivery ().