Explaining TFP Growth rates: Dissimilar effect of openness between different income groups of countries

González, Germán and Constantín, Sebastián (2008): Explaining TFP Growth rates: Dissimilar effect of openness between different income groups of countries.

Abstract

The discussion about the relationship between openness and economic growth is still open. The dissent is about the theoretical foundation of the relationship, and about the robustness of the positive effect that is presented in the empirical arena. Our paper has the purpose of incorporating new evidence to the discussion. To do that, we improve the process of TFP estimation and use new data sources. Our principal result is that there are important differences between groups of countries with regard to the relevant factors that explain the technological performance.

• Item Type: MPRA Paper
• Language: English
• Keywords: Total Factor Productivity, Openness, Income groups of countries
• Subjects: O - Economic Development, Innovation, Technological Change, and Growth > O4 - Economic Growth and Aggregate Productivity > O47 - Empirical Studies of Economic Growth ; Aggregate Productivity ; Cross-Country Output Convergence; F - International Economics > F4 - Macroeconomic Aspects of International Trade and Finance > F43 - Economic Growth of Open Economies

References

Edwards, S. (1989) “Openness, outward orientation, trade liberalization and economic performance in developing countries” NBER Working Paper Series, Cambridge.

Edwards, S. (1998) “Openness, productivity and growth: what do we really know?”, Economic Journal, 108 (March), 383-398.

González, G. (2002) “Apertura, Orientación Comercial y Productividad Total de los Factores: La incidencia del nivel de desarrollo”, Anales de la Asociación Argentina de Economía Política, XXXVII Reunión Anual. Argentina.

Hall, R. and C. Jones (1999) “Why do some countries produce so much more output per worker than others”, Quarterly Journal of Economics, 114, 1, 83-116.

Klenow, P. and A. Rodriguez-Claire (1997) The Neoclassical Revival in Growth Economics: Has It Gone Too Far?, in Bernanke & Rotemberg (ed.) NBER MACROECONOMICS ANNUAL, Vol. 12, 73-102. MIT Press.

Mankiw, N. G., Romer D. & D. Weil (1992) “A contribution to the Empirics of Economic Growth”, Quarterly Journal of Economics, 107, 2, 407-437.

Miller, S. and M. Upadhyay (2000) “The effects of openness, trade orientation, and human capital on total factor productivity”, Journal of Development Economics, 63, 399-423.

Miller, S. and M. Upadhyay (2002) “Total factor productivity, human capital, and outward orientation: differences y stage of development and geographic regions” University of Nevada and Eastern Illinois University working paper.

Nehru, V and Dhareshwar, A, “A New Database on Physical Capital Stock: Sources, Methodology and Results”, Revista de Analisis Economico Vol 8, Junio 1993.

Rodríguez, F. and D. Rodrik (2000) “Trade policy and economic growth: a skeptic´s guide to the cross-national evidence”, en Bernanke and Rogoff (eds.) NBER Macroeconomics Annual, Cambridge, Mass.: MIT Press.