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Nonlinearities in productivity growth: A semi-parametric panel analysis

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  • Azomahou, Theophile

    (UNU-MERIT/MGSoG, Maastricht University)

  • Diene, Bity

    (University of Auvergne, CERDI)

  • Diene, Mbaye

    (University Cheikh-Anta-Diop, CRES)

Abstract

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.

Suggested Citation

  • Azomahou, Theophile & Diene, Bity & Diene, Mbaye, 2012. "Nonlinearities in productivity growth: A semi-parametric panel analysis," MERIT Working Papers 2012-046, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    • Handle: RePEc:unm:unumer:2012046
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    References listed on IDEAS

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    Keywords

    network formation; strategic alliances; innovation; network strategy; interfirm networks;
    All these keywords.

    JEL classification:

    • C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Semiparametric and Nonparametric Methods: General
    • I23 - Health, Education, and Welfare - - Education - - - Higher Education; Research Institutions
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General

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