 Market Institutions and Factor Shares Across CountriesJohn Dawson and Brad Sturgill () Structural Change and Economic Dynamics, 2022, vol. 60, issue C, 266-289 Abstract: This paper examines the relationship between institutions and the income shares of key factors of production across countries. We extend previous work in this area by considering the unskilled labor and human capital components of the total labor share along with the shares of physical capital and natural capital. We introduce a four-factor production framework to derive empirical specifications for these factors. In a cross-section of 75 countries, we find the positive relationship between market institutions and the total labor share is driven by its underlying human capital component—an effect appearing predominantly in lower- and middle-income countries. Market institutions are negatively related to the total capital share and its physical capital component, especially in middle- and upper-income countries. Political institutions have a small or statistically insignificant effect in explaining factor shares after controlling for economic institutions. The results provide insight into the dynamics of factor shares over the development process. Keywords: institutions; economic freedom; factor shares (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:streco:v:60:y:2022:i:c:p:266-289 DOI: 10.1016/j.strueco.2021.11.011 Access Statistics for this article Structural Change and Economic Dynamics is currently edited by F. Duchin, H. Hagemann, M. Landesmann, R. Scazzieri, A. Steenge and B. Verspagen More articles in Structural Change and Economic Dynamics from Elsevier |
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