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Labour productivity growth and convergence in manufacturing: A nonparametric production frontier approach

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  • Nader AlKathiri

Abstract

Labour productivity growth in manufacturing is decomposed into technical efficiency change (movement towards or away from the frontier), technological progress (shifts in the production frontier), and capital accumulation (movement along the frontier) using a nonparametric production frontier method. The results suggest that labour productivity growth is primarily driven by capital accumulation and to a lesser extent technological progress, while technical efficiency is deteriorating over the period 1995–2014. We find that technological progress appears to be non-neutral, as the world manufacturing production frontier expands only at higher capital intensities, benefiting highly industrialized nations. We also find evidence of unconditional convergence in labour productivity for the manufacturing sector. Capital accumulation is the main driver of the observed unconditional convergence, whereas technological change is contributing to divergence rather than convergence. The findings suggest that expanding manufacturing activities through capital accumulation is essential for developing countries to catch-up with developed countries.

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  • Nader AlKathiri, 2022. "Labour productivity growth and convergence in manufacturing: A nonparametric production frontier approach," Applied Economics, Taylor & Francis Journals, vol. 54(4), pages 406-429, January.
    • Handle: RePEc:taf:applec:v:54:y:2022:i:4:p:406-429
    DOI: 10.1080/00036846.2021.1963410
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    Cited by:

    1. Tetiana Kornieieva & Miguel Varela & Ana Lúcia Luís & Natália Teixeira, 2022. "Assessment of Labour Productivity and the Factors of Its Increase in European Union 27 and Ukrainian Economies," Economies, MDPI, vol. 10(11), pages 1-25, November.
    2. Hameed Gul & Ihtisham ul Haq & Dilawar Khan, 2022. "Exploring Intra-Group Income Convergence for the Central Asian Countries," iRASD Journal of Economics, International Research Alliance for Sustainable Development (iRASD), vol. 4(3), pages 448-461, September.
    3. AlKathiri, Nader, 2024. "Drivers of unconditional income convergence," Economics Letters, Elsevier, vol. 234(C).
    4. Mustafa Zuhal, 2023. "Technological Convergence in Emerging Economies: An Investigation with Unit Root Tests," Journal of Economic Policy Researches, Istanbul University, Faculty of Economics, vol. 10(2), pages 567-586, July.

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