Productivity Dynamics in a Large Sample of Countries: A Panel Study

Nazrul Islam

Review of Income and Wealth, 2003, vol. 49, issue 2, 247-272

Abstract: Recent research shows that productivity differences are more important than differences in accumulation rates in explaining per capita income differences across countries. So far static differences in productivity have been mainly computed and analyzed in large samples of countries. This paper extends the research by focusing on productivity dynamics. It uses the panel approach to compute productivity indices for a large sample of countries for two time periods, namely an initial period of 1960–75 and a subsequent period of 1975–90. This allows computation of ordinal and cardinal changes in productivity between the two periods. The results show considerable variation in productivity dynamics across countries. The task ahead is to find out what accounts for the observed dynamics.

Date: 2003
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