scholarly journals Measuring Total Factor Productivity: Accounting for cross country differences in income per capita // Мјерење укупне факторске продуктивности: обрачун међудржавних разлика у БДП-у по раднику

2011 ◽  
Vol 11 (19) ◽  
pp. 75
Author(s):  
Stevo Pucar ◽  
Zoran Borovic
Keyword(s):  
Total Factor Productivity ◽  
Factor Productivity ◽  
Productivity Measurement ◽  
Production Factors ◽  
First Pass ◽  
Development Accounting ◽  
Proximate Determinants ◽  
Country Differences ◽  
Cross Country ◽  
The Cross

Summary: Why are some countries so much richer than others? Why do some countries produce so much more output per worker than others? Influential works by Klenow & Rodriguez-Clare (1997), Hall and Jones (1999), and Parente & Prescott (2000), among others, have argued that most of the cross country differences in output per worker is explained by differences in total factor productivity. Total factor productivity measurement enables researchers to determine the contribution of supply-side production factors to economic growth. Development Accounting is a first-pass attempt at organizing the answer around two proximate determinants: factors of production and efficiency. It answers the question “how much of the cross-country income variance can be attributed to differences in (physical and human) capital, and how much to differences in the efficiency with which capital is used’’?In this article, we will outline framework for growth accounting to account for cross-country difference in income of Republic of Srpska, Republic of Croatia and Republic of Serbia. The current consensus is that differences in income per worker across countries do not arise primarly from differences in quantities in capital or labour, but rather from differences in efficiency with which are these factors used. We find that total factor productivity is very important for the growth of output per worker, but only in cases of Serbia and Croatia. In case of Srpska the most important factor for the growth of output per worker is growth of capital.Резиме: Зашто су неке земље толико богатије од других? Зашто неке земље остварују много већи обим производње по раднику од других? Утицајни радови Klenow и Rodriguez-Clare (1997), Hall и Jones (1999), и Parente и Prescott (2000), између осталих, тврдили су да је највећи број међудржавних разлика у обиму производње по раднику резултат разлика у Укупној Факторској Продуктивности. Мјерење Укупне Факторске Продуктивности омогућава истраживачима да утврде допринос фактора на страни понуде привредном расту. Развој ‘’рачуноводства раста’’ представља први покушаја анализирања двије сродне детерминанте раста: фактори производње и ефикасности.  Ова анализа даје одговор на питање “колико су међудржавне разлике у оствареном БДП-у резултат међудржавних разлика у (физичком и људском) капиталу, а колико су резултат разлика у ефикасности којом се капитал користи’’?У овом раду ћемо приказати оквир за “рачуноводство раста’’ који ће се примјенити за обрачун међудржавних разлика у БДП-у по раднику за Републику Српску, Републику Хрватску и Републику Србију. Тренутни консензус међу ауторима је да разлике у БДП-у по раднику између земаља не настају првенствено због разлика у количинама капитала или рада, него због разлика у ефикасности са којом се ови фактори користе. Анализом смо дошли до закључка да је Укупна Факторска Продуктивност веома важна за раст производње по раднику, али само у случајевима Србије и Хрватске. У случају Српске најважнији фактор за раст производње по раднику је раст техничко-технолошке опремљености рада капиталом.

scholarly journals Finance and Development: A Tale of Two Sectors

2011 ◽  
Vol 101 (5) ◽  
pp. 1964-2002 ◽  
Author(s):  
Francisco J Buera ◽  
Joseph P Kaboski ◽  
Yongseok Shin
Keyword(s):  
Quantitative Analysis ◽  
Total Factor Productivity ◽  
Financial Frictions ◽  
Substantial Part ◽  
Factor Productivity ◽  
Country Differences ◽  
Cross Country ◽  
Relative Productivity ◽  
The Relationship ◽  
Two Sectors

We develop a quantitative framework to explain the relationship between aggregate/sector-level total factor productivity (TFP) and financial development across countries. Financial frictions distort the allocation of capital and entrepreneurial talent across production units, adversely affecting measured productivity. In our model, sectors with larger scales of operation (e.g., manufacturing) have more financing needs, and are hence disproportionately vulnerable to financial frictions. Our quantitative analysis shows that financial frictions account for a substantial part of the observed cross-country differences in output per worker, aggregate TFP, sector-level relative productivity, and capital-to-output ratios. (JEL E23, E44, O41, O47)

scholarly journals Development Accounting

2010 ◽  
Vol 2 (1) ◽  
pp. 207-223 ◽  
Author(s):  
Chang-Tai Hsieh ◽  
Peter J. Klenow
Keyword(s):  
Human Capital ◽  
Total Factor Productivity ◽  
Capital Accumulation ◽  
Physical Capital ◽  
Human Capital Accumulation ◽  
Factor Productivity ◽  
Income Levels ◽  
The Past ◽  
Development Accounting ◽  
Proximate Determinants

Researchers have made much progress in the past 25 years in accounting for the proximate determinants of income levels: physical capital, human capital, and Total Factor Productivity (TFP). But we still know little about why these factors vary. We argue that TFP exerts a powerful influence on output not only directly, but also indirectly, through its effect on physical and human capital accumulation. We discuss why TFP varies across countries, highlighting misallocation of inputs across firms and industries as a key determinant. (JEL E22, E23, F21, F35, O10, O40)

scholarly journals The «Argentine failure» from a comparative perspective: the role of total factor productivity

2011 ◽  
Vol 29 (3) ◽  
pp. 301-326
Author(s):  
Germán H. González ◽  
Valentina N. Viego
Keyword(s):  
Structural Change ◽  
Total Factor Productivity ◽  
Development Process ◽  
Aggregate Productivity ◽  
Factor Productivity ◽  
Income Differentials ◽  
Development Accounting ◽  
Per Capita ◽  
Cross Country

AbstractThe paper proposes an interpretation of the «Argentine failure» based on development accounting and econometrical approaches frequently used in the current cross-country income differentials literature. The main results are as follows: the development process of Canada — in term ofper capitaGDP –– moved away from that of Argentina around 1918, but there was a structural change in the determinants of aggregate productivity around 1935 that led Argentina to take a diverging path. Recovery — thanks to improved aggregate productivity –– was not possible after 1940. The results support the idea that Argentina fell into a «staple trap», while Canada embarked on a successful path due to the adjacency and political proximity with a larger and complementary economy.

ENTRY COSTS, FINANCIAL FRICTIONS, AND CROSS-COUNTRY DIFFERENCES IN INCOME AND TFP

2014 ◽  
Vol 20 (4) ◽  
pp. 884-908 ◽  
Author(s):  
El-hadj Bah ◽  
Lei Fang
Keyword(s):  
Financial Market ◽  
Financial Frictions ◽  
Substantial Portion ◽  
Factor Productivity ◽  
Entry Costs ◽  
Level Statistics ◽  
Country Differences ◽  
Cross Country ◽  
Primary Focus ◽  
The U.S

This paper develops a model to assess the quantitative effects of entry costs and financial frictions on cross-country income and total factor productivity (TFP) differences, with a primary focus on the interaction between entry costs and financial frictions. The model is calibrated to match the establishment-level statistics for the U.S. economy, assuming a perfect financial market. The simulations based on the calibrated model show that entry costs and financial frictions together account for 55% and 46% of the cross-country variation in output and TFP in the data. Moreover, a substantial portion of the variation is accounted for by the interaction between entry costs and financial frictions. The main mechanism is that financial frictions amplify the effect of entry costs.

scholarly journals Human Capital and the Wealth of Nations

2014 ◽  
Vol 104 (9) ◽  
pp. 2736-2762 ◽  
Author(s):  
Rodolfo E. Manuelli ◽  
Ananth Seshadri
Keyword(s):  
Human Capital ◽  
Demographic Variables ◽  
Factor Productivity ◽  
Rates Of Return ◽  
Capital Theory ◽  
Country Differences ◽  
Cross Country ◽  
Wealth Of Nations

We reevaluate the role of human capital in determining the wealth of nations. We use standard human capital theory to estimate stocks of human capital and allow the quality of human capital to vary across countries. Our model can explain differences in schooling and earnings profiles and, consequently, estimates of Mincerian rates of return across countries. We find that effective human capital per worker varies substantially across countries. Cross-country differences in Total Factor Productivity (TFP) are significantly smaller than found in previous studies. Our model implies that output per worker is highly responsive to changes in TFP and demographic variables. (JEL E23, I25, J24, J31, O47)

scholarly journals The Relative Efficiency of Skilled Labor across Countries: Measurement and Interpretation

2022 ◽  
Vol 112 (1) ◽  
pp. 235-266
Author(s):  
Federico Rossi
Keyword(s):  
Human Capital ◽  
Relative Efficiency ◽  
Skilled Labor ◽  
Stages Of Development ◽  
Skill Bias ◽  
Development Accounting ◽  
Country Differences ◽  
Cross Country ◽  
Rich Countries ◽  
High Skill

I study how the relative efficiency of high- and low-skill labor varies across countries. Using microdata for countries at different stages of development, I document that differences in relative quantities and wages are consistent with high-skill workers being relatively more productive in rich countries. I exploit variation in the skill premia of foreign-educated migrants to discriminate between two possible drivers of this pattern: cross-country differences in the skill bias of technology and in the relative human capital of skilled labor. I find that the former is quantitatively more important, and discuss the implications of this result for development accounting. (JEL I26, J24, J31, J61, L16, O15)

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