Productivity Convergence Across Industries and Countries: The Importance of Theory-based Measurement

Robert Inklaar and Marcel Timmer

No GD-109, GGDC Research Memorandum from Groningen Growth and Development Centre, University of Groningen

Abstract: Cross-country studies of economic growth have been hampered by the scarcity of reliable data on productivity at the sector level, see Bernard and Jones (AER, 2001) and Rogerson (JPE, 2008). We bring together literature on industry prices, human capital and capital assets to construct industry-level productivity measures that are well-grounded in neo-classical production theory. These theory-based measures differ widely from the crude measures commonly used in the literature. We use these to confirm and strengthen the finding of Bernard and Jones (AER, 1996) that for advanced OECD countries, patterns of convergence across sectors have differed since 1970: while productivity in market services converged, there is no convergence in manufacturing. More detailed analysis confirms that patterns of convergence are highly industry-specific. There is no dominant convergence trend in sectoral productivity growth across advanced countries.

Date: 2009
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Citations: View citations in EconPapers (33)

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Related works:
Chapter: Productivity Convergence Across Industries and Countries: The Importance of Theory-based Measurement (2012)
Journal Article: PRODUCTIVITY CONVERGENCE ACROSS INDUSTRIES AND COUNTRIES: THE IMPORTANCE OF THEORY-BASED MEASUREMENT (2009)
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