Structural Development Accounting
Gino Gancia,
Andreas Müller and
Fabrizio Zilibotti
No 494, Working Papers from Barcelona School of Economics
Abstract:
In this paper, we construct and estimate a unified model combining three of the main sources of cross-country income disparities: differences in factor endowments, barriers to technology adoption and the inappropriateness of frontier technologies to local conditions. The key components of our framework are di€erent types of workers (skilled and unskilled labor), distortions to capital accumulation, directed technical change, costly adoption and spillovers from the world technology frontier. Despite its parsimonious parametrization, our empirical model provides a good fit of GDP data for up to 90 countries in 1970 and 2000. We use the model to assess the relative importance of alternative factors a€ecting the world income distribution and to perform counterfactual experiments. Our results suggests that removing barriers to technology adoption would increase output of the average OECD economy relative to the US frontier from 68.3% to 92.5%. The average non-OECD country would instead increase from 17.4% to 53.8%. Slashing barriers would also lead to higher skill premia in all countries. We also study how globalization can shape income disparities. In the absence of global IPR protection, we find that trade in goods amplifies income disparities, induces skill-biased technology adoption and increases skill premia in the majority of countries. These results are reverted if trade liberalization is coupled with international protection of IPR.
Keywords: Directed Technology Adoption; development accounting; Distance to Frontier; Inappropriate Technologies; Skill-biased Technical Change; Productivity; TFP differences (search for similar items in EconPapers)
JEL-codes: F43 O11 O31 O33 O38 O41 O43 O47 (search for similar items in EconPapers)
Date: 2010-08
References: Add references at CitEc
Citations: View citations in EconPapers (2)
Downloads: (external link)
http://www.barcelonagse.eu/sites/default/files/working_paper_pdfs/494.pdf (application/pdf)
Related works:
Working Paper: Structural Development Accounting (2011)
Working Paper: Structural development accounting (2011)
Working Paper: Structural development accounting (2011)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
HTML/Text
Persistent link: https://EconPapers.repec.org/RePEc:bge:wpaper:494
Access Statistics for this paper
More papers in Working Papers from Barcelona School of Economics Contact information at EDIRC.
Bibliographic data for series maintained by Bruno Guallar (bruno.guallar@bse.eu).