Modeling Technology and Technological Change in Manufacturing: How do Countries Differ?

Markus Eberhardt and Francis Teal

No 2008-12, CSAE Working Paper Series from Centre for the Study of African Economies, University of Oxford

Abstract: In this paper we ask how technological differences in manufacturing across countries can best be modeled when using a standard production function approach. We show that it is important to allow for differences in technology as measured by differences in parameters. Of similar importance are time-series properties of the data and the role of dynamic processes, which can be thought of as aspects of technological change. Regarding the latter we identify both an element that is common across all countries and a part which is country-specific. The estimator we develop, which we term the Augmented Mean Group estimator (AMG), is closely related to the Mean Group version of the Pesaran (2006) Common Correlated Effects estimator. Once we allow for parameter heterogeneity and the underlying time-series properties of the data we are able to show that the parameter estimates from the production function are consistent with information on factor shares.

Keywords: Manufacturing Production; Parameter Heterogeneity; Nonstationary Panel Econometrics (search for similar items in EconPapers)
JEL-codes: C23 O14 O47 (search for similar items in EconPapers)
Date: 2008
References: View complete reference list from CitEc
Citations: View citations in EconPapers (15)

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Related works:
Working Paper: Productivity Analysis in Global Manufacturing Production (2010)
Working Paper: Modeling technology and technological change in manufacturing: how do countries differ? (2008)
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