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Productivity, Factor Accumulation and Social Networks: Theory and Evidence

R. Quentin Grafton (), Tom Kompas () and Dorian Owen ()

Economics and Environment Network Working Papers from Australian National University, Economics and Environment Network

Abstract: The paper analyzes how social barriers to communication affect economy-wide productivity and factor accumulation. Using a dynamic model of an economy that includes a reproducible capital stock (physical or human) and effective labor, a negative relationship is shown to exist between social barriers to communication and total factor productivity (TFP), per capita consumption and reproducible capital. Robust estimates obtained from cross-country data are consistent with the model’s predictions. The theory and empirical results help explain cross-country differences in TFP, the high productivity performance of leading industrialized countries and how productivity ‘catch up’ may be initiated.

Keywords: productivity; dynamic model; barriers to communication (search for similar items in EconPapers)
JEL-codes: O41 C61 C21 (search for similar items in EconPapers)
Pages: 41 pages
Date: 2004-03
New Economics Papers: this item is included in nep-dev, nep-evo and nep-net
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