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Is newer always better? A reinvestigation of productivity dynamics using updated PWT data

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  • Yan Meng

    (University of Melbourne)

  • Christopher F. Parmeter

    (University of Miami)

  • Valentin Zelenyuk

    (University of Queensland)

Abstract

Understanding the drivers of productivity remains one of the most sought after phenomena in economics. The ability to create produce more from less resources is undoubtedly appealing. Using recently updated Penn World Table data, we investigate to what degree previous results using a popular productivity decomposition are maintained. We find that, contrary to conclusions from earlier work, technical efficiency (catching up) played a more pronounced role in the global increase in productivity over the 1965–1990 period. We also find a larger effect for technical change than earlier work and a far lesser role for capital deepening. This suite of results augurs the coming information age that placed less weight on physical capital to create and sustain wealth. Taken together our findings here suggest that as data collection, its quality and evaluation methods evolve, so too will our understanding of productivity dynamics.

Suggested Citation

  • Yan Meng & Christopher F. Parmeter & Valentin Zelenyuk, 2023. "Is newer always better? A reinvestigation of productivity dynamics using updated PWT data," Journal of Productivity Analysis, Springer, vol. 59(1), pages 1-13, February.
    • Handle: RePEc:kap:jproda:v:59:y:2023:i:1:d:10.1007_s11123-022-00649-w
    DOI: 10.1007/s11123-022-00649-w
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    Cited by:

    1. Valentin Zelenyuk, 2023. "Productivity analysis: roots, foundations, trends and perspectives," Journal of Productivity Analysis, Springer, vol. 60(3), pages 229-247, December.
    2. Laurens Cherchye & Bram Rock & Dieter Saelens & Marijn Verschelde, 2024. "Productive efficiency analysis with incomplete output information," Journal of Productivity Analysis, Springer, vol. 62(3), pages 291-301, December.
    3. Andreas Eder & Wolfgang Koller & Bernhard Mahlberg, 2024. "The contribution of industrial robots to labor productivity growth and economic convergence: a production frontier approach," Journal of Productivity Analysis, Springer, vol. 61(2), pages 157-181, April.

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