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Incorporating temporal and country heterogeneity in growth accounting—an application to EU-KLEMS

A. Peyrache () and Alicia Rambaldi ()
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A. Peyrache: The University of Queensland

Journal of Productivity Analysis, 2017, vol. 47, issue 2, No 4, 143-166

Abstract: Abstract The paper derives measures of sectoral productivity from a model specification that allows for cross-sectional specific trends and time varying slopes in panel models with fixed N. The specification nests a number of commonly used panel data models introduced in the literature which deal with group specific trends. The econometric model is represented in state-space form. We provide a production frontier interpretation of this group specific temporal variation and derive a post-estimation growth accounting to provide a quantitative assessment of the main factors behind sectoral labour productivity growth. We make use of the EU-KLEMS dataset, covering the period 1977–2007 for 13 countries and 20 sectors of each economy.

Keywords: Time trends; Sectoral productivity; Malmquist; Fix N panels; State-space; C13; C22; C23; O47 (search for similar items in EconPapers)
Date: 2017
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DOI: 10.1007/s11123-017-0498-2

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