Productivity Analysis in Global Manufacturing Production

Francis Teal and Markus Eberhardt

No 515, Economics Series Working Papers from University of Oxford, Department of Economics

Abstract: Despite the widely recognised importance of the manufacturing industry for successful development few studies investigate this sector in cross-country analysis. We fill this gap in the literature by analysing manufacturing production across a large number of developing and developed economies. Our empirical framework allows for heterogeneous production technology and accounts for endogeneity as well as cross-section dependence in the panel. Our results imply that differences in production technology are of crucial importance for understanding cross-country differences in labour productivity and their underlying causes. In the light of these findings the interpretation of regression intercepts as TFP level estimates collapses and we introduce an alternative measure which is robust to parameter heterogeneity.

Keywords: Cross-country analysis; parameter heterogeneity; productivity levels; panel time series econometrics; common factor model (search for similar items in EconPapers)
JEL-codes: C23 O14 O47 (search for similar items in EconPapers)
Date: 2010-11-01
New Economics Papers: this item is included in nep-eff
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Citations: View citations in EconPapers (332)

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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)
Working Paper: Modeling technology and technological change in manufacturing: how do countries differ? (2008)
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