Working Paper #2012-046
Nonlinearities in productivity growth: A semi-parametric panel analysis
We use country panel data spanning over 1998-2008 for both developed and
developing countries to study the productivity growth when countries are
close to the technology frontier. Relying on a semi-parametric
generalized additive model, we estimate both reduced and structural
forms for total factor productivity growth. We consider three
measurements of frontier: the economy with the highest level of
productivity growth, the world productivity growth and the productivity
growth of the USA. We obtain a U-shape relation between productivity
growth and the proximity to the world productivity growth. The relation
between productivity growth and human capital displays an inverted
U-shape form (res. U-shape) when the proximity to the highest
productivity growth is used (res. the proximity to productivity growth
of USA). Total staff in R&D has an inverted W-shape effect on
productivity growth. The share of R&D expenditure funded by government
and from abroad impact positively the growth of productivity. However,
the increase in government spending on R&D has a greater impact on
productivity growth when the former is weak, and a smaller impact when
R&D spending is already high. International trade has a positive effect
on productivity growth. Specification tests show that our
semi-parametric models provide a better approximation of the data
compared to the parametric analogue, revealing a high degree of
nonlinearity governing productivity growth.
- Keywords
-
- R&D
- TFP
- panel data
- nonparametric estimation
- reduced vs. structural form
- JEL codes
-
- C14
- I23
- O3
- O4
Cite this as
APA 7th ed.Azomahou, T. T., Diene, B., & Diene, M. (2012). Nonlinearities in productivity growth: A semi-parametric panel analysis (UNU-MERIT Working Paper No. 2012-046). UNU-MERIT. https://unu-merit.nl/publications/working-papers/abstract/?id=4736