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21. Sectoral Productivity Trend: Convergence Islands in Oceans of Divergence

Author:
Fulvio Castellacci, Gaaitzen J. de Vries, and Bart Los
Publication Date:
07-2010
Content Type:
Working Paper
Institution:
Norwegian Institute of International Affairs
Abstract:
In their influential study on productivity growth at the sector-level, Bernard and Jones (1996, BJ) observed convergence of aggregate labor productivity levels in 14 highly developed countries in 1970-1987. They also found evidence that this could be attributed to convergence in services productivity rather than in manufacturing. The main question this paper addresses is whether this result can be generalized to a broader set of countries. Several strands of growth theory suggest that thresholds with regard to a variety of issues can lead to multiple growth regimes, which are likely to lead to very heterogeneous patterns of convergence and divergence. To analyze this, we use econometric techniques that explicitly allow for identification of parameter heterogeneity (quantile regressions and quantile smoothing splines), both with regard to initial conditions and to performance conditional on these initial productivity levels. BJ's data are extended in several dimensions. The recently developed sectoral dataset we use spans the period 1970-2004 and covers 49 countries, including many developing countries. Overall, our findings suggest that convergence as found by BJ only applies to limited groups of country-sectors ('convergence islands'), whereas the biggest parts of our sample spaces can be considered as 'oceans of divergence'.
Topic:
Development, Economics, and Emerging Markets

22. Closing the Technology Gap?

Author:
Fulvio Castellacci
Publication Date:
08-2010
Content Type:
Working Paper
Institution:
Norwegian Institute of International Affairs
Abstract:
This paper focuses on the dimensions shaping the dynamics of technology. We present a model where the knowledge stock of a country grows over time as a function of three main factors: its innovation intensity, its technological infrastructures and its human capital. The latter two variables contribute to determine the absorptive capacity of a country as well as its innovative ability. Based on this theoretical framework, we carry out an empirical analysis that investigates the dynamics of technology in a large sample of developed and developing economies in the last two-decade period, and studies its relationships with the growth of income per capita in a dynamic panel model setting. The results indicate that the cross-country distributions of technological infrastructures and human capital have experienced a process of convergence, whereas the innovative intensity is characterized by increasing polarization between rich and poor economies. Thus, while the conditions for catching up have generally improved, the increasing innovation gap represents a major factor behind the observed differences in income per capita.
Topic:
Development, Economics, Emerging Markets, Science and Technology, and Infrastructure

23. Crime, Police Corruption and Development

Author:
Jens Chr.1 Andvig and Gbewopo Attila
Publication Date:
03-2010
Content Type:
Working Paper
Institution:
Norwegian Institute of International Affairs
Abstract:
Recently economists have begun to study various aspects of public sector institutions (with their behavioral neighborhoods) and their effects on the long run economic development. Degrees of corruption, rule of law and protection of property rights have all apparently significant economic impact. These results are all based on the construction of indicators for these difficult-to-observe explanatory variable complexes. In most cases the indicators applied have been developed for most countries and have on the one hand 'nice' statistical properties when embedded in regression equations, but on the other hand are conceptually fuzzy with unclear relationships to basic observations. In this paper we go through many of the same relationships, but based on international efforts to collect questionnaire information about citizens' experience with crime and police corruption. This information is more conceptually distinct and likely to be more closely related to relevant experience, but proves on the other hand less amenable to econometric analysis. Despite the latter weakness we have found it worthwhile to pursue it in order to complement the indicator- based approaches.
Topic:
Corruption, Crime, Economics, and Law

24. Regional Development of Russian Industry

Author:
Linda Skjold Oksnes
Publication Date:
05-2009
Content Type:
Working Paper
Institution:
Norwegian Institute of International Affairs
Abstract:
The paper analyzes the convergence process of industrial productivity across Russian regions during the period 1996-2004 by applying empirical methods. The industrial sector refers to, in accordance with Russian official statistics, oil gas extraction, electricity production, mining quarrying and manufacturing. Convergence in productivity levels is well analyzed in economic literature, but few have tested the hypothesis on Russian regions. Most previous convergence analysis of Russian regions has examined the development in income per capita. Russia's special history and vast geographical extent have led to huge regional variations in resource endowments, market access and industrial structure, to name a few. Since the regression results are highly sensitive for regionspecific factors, these are identified and controlled for in the analysis. In addition, panel data techniques are used to check the robustness of the results to region-specific characteristics, which are not always measurable. The analysis also tests whether there is a tendency to economic agglomeration in the data. The hypothesis of absolute convergence is not supported in the analysis, but when region-specific factors are controlled for there are signs of convergence among Russian regions.Trade and investment as a share of regional industrial production appear in the analysis as the most significant explanatory variables.
Topic:
Development, Economics, Industrial Policy, and Infrastructure
Political Geography:
Russia

25. Regional Trade Agreements vs. Multilateral Trading System: A Study of Chinese Interests and Policy Options

Author:
Chen Taifeng
Publication Date:
07-2009
Content Type:
Working Paper
Institution:
Norwegian Institute of International Affairs
Abstract:
The simultaneous emergence of rapidly developing RTAs and a strengthened and more encompassing MTS attracts worldwide attention. “Complementary Competition” is the very essence of the RTA/MTS relationship. Both compete complementarily in trade liberalization and economic integration initiatives. Since joining the WTO, China has pursued a “three-pronged” economic and trade development strategy of pushing forward regional trade cooperation and bilateral trade cooperation while enhancing multilateral trade and cooperation. After joining the WTO, China has basically developed a spatial landscape of “focusing on Asia-Pacific and reaching out globally” with regard to its participation in the RTA.By participating in RTAs, China can obtain the same benefits of market openness and trade and investment liberalization as other countries do. It is important for China not to act too hastily, but to push forward regional cooperation step by step from adjacent to remote regions and level by level, from easy to difficult regions. Asia is especially important to China, and Asian economic cooperation is the foundation of China's RTA policy.
Topic:
Economics, International Trade and Finance, and Markets
Political Geography:
China and Asia

26. Theoretical Models of Heterogeneity, Growth and Competitiveness

Author:
Fulvio Castellacci
Publication Date:
09-2009
Content Type:
Working Paper
Institution:
Norwegian Institute of International Affairs
Abstract:
This paper presents a survey of theoretical models of heterogeneity, growth and competitiveness. We compare two main theoretical traditions, evolutionary economics and mainstream heterogeneity models, in order to investigate whether the incorporation of heterogeneous agents has made the recent wave of mainstream models more similar to the evolutionary modelling style and results. The results of our survey exercise can be summarized as follows. On the one hand, we observe some increasing similarities and converging aspects between the evolutionary and the mainstream approaches to the study of heterogeneity. On the other hand, however, there are still some fundamental differences between them, which mainly relate to the distinct set of theoretical assumptions and methodological frameworks in which these heterogeneity models are set up and rooted. In short, the evolutionary approach emphasizes the complexities of the growth process and makes an effort to provide a realistic description of it, whereas the mainstream approach does instead follow a modelling methodology that emphasizes the analytical power and tractability of the formalization, even if that implies a somewhat simplified and less realistic description of the growth process.
Topic:
Development, Economics, Industrial Policy, International Trade and Finance, and Markets

27. Technological Regimes, Schumpeterian Patterns of Innovation and Firm Level Productivity Growth

Author:
Fulvio Castellacci and Jinghai Zheng
Publication Date:
03-2008
Content Type:
Working Paper
Institution:
Norwegian Institute of International Affairs
Abstract:
The paper investigates the relationships between technological regimes and firm-level productivity performance, and it explores how such a relationship differs in different Schumpeterian patterns of innovation. The analysis makes use of a rich dataset containing data on innovation and other economic characteristics of a large representative sample of Norwegian firms in manufacturing and service industries for the period 1998-2004. First, we decompose TFP growth into technical progress and efficiency changes by means of data envelopment analysis. We then estimate an empirical model that relates these two productivity components to the characteristics of technological regimes and a set of other firm-specific factors. The results indicate that: (1) TFP growth has mainly been achieved through technical progress, while technical efficiency has on average decreased; (2) the characteristics of technological regimes are important determinants of firm-level productivity growth, but their impacts on technical progress are different from the effects on efficiency change; (3) the estimated model works differently in the two Schumpeterian regimes. Technical progress has been more dynamic in Schumpeter Mark II industries, while efficiency change has been more important in Schumpeter Mark I markets.
Topic:
Economics and Science and Technology
Political Geography:
Europe and Norway

28. Technology Clubs, Technology Gaps and Growth Trajectories

Author:
Fulvio Castellacci
Publication Date:
04-2008
Content Type:
Working Paper
Institution:
Norwegian Institute of International Affairs
Abstract:
This paper looks at the convergence clubs literature from a Schumpeterian perspective, and it follows the idea that cross-country differences in the ability to innovate and to imitate foreign technologies determine the existence of clustering, polarization and convergence clubs. The study investigates the characteristics of different technology clubs and the growth trajectories that they have followed over time. The cross-country empirical analysis first explores the existence of multiple regimes in the data by means of cluster analysis techniques. It then estimates a technology-gap growth equation in a dynamic panel model specification. The empirical results identify three distinct technology clubs, and show that these are characterized by remarkably different technological characteristics and growth behavior.
Topic:
Development, Economics, International Trade and Finance, and Science and Technology

29. Fisheries Trade in India: Understanding Potentials and Barriers.

Author:
Meenakshi Rajeev
Publication Date:
08-2008
Content Type:
Working Paper
Institution:
Norwegian Institute of International Affairs
Abstract:
The fisheries sector assumes significance in the Indian economy in several respects. The most important amongst them is the providence of livelihood to many poor households especially located in the coastal areas. These households can generate income from the sector due to the fact that many varieties of marine fishes have been exported from the country including chilled and dried items, fish oil, shrimp and prawns. Thus from the point of view of employment and income generation, international trade has considerable significance as well. It is the trade aspect of the sector that would be the focus of the current paper.
Topic:
Agriculture, Demographics, Economics, and Food
Political Geography:
South Asia and India

30. Police Corruption, Crime and Crime Reporting: A Simultaneous Equations Approach

Author:
Omar Azfar and Tugrul Gurgur
Publication Date:
09-2008
Content Type:
Working Paper
Institution:
Norwegian Institute of International Affairs
Abstract:
We study the causal relationship between police corruption, crime and crime reporting, using data from the International Crime Victimization Survey. Using a simultaneous equations approach we find a number of intuitive relationships, which are statistically significant. The clearest of these is that crime reporting reduces police corruption.
Topic:
Security, Crime, Economics, and Sociology
Political Geography:
Africa