TFP growth and its determinants: a model averaging approach

Michael Danquah, Enrique Moral-Benito and Bazoumana Ouattara

Empirical Economics, 2014, vol. 47, issue 1, 227-251

Abstract: Total Factor Productivity (TFP) accounts for a sizable proportion of the income differences across countries. Two challenges remain to researchers aiming to explain these differences: on the one hand, TFP growth is hard to measure empirically; on the other hand, model uncertainty hampers consensus on its key determinants. This paper combines a non-parametric measure of TFP growth with Bayesian model averaging techniques in order to address both issues. Our empirical findings suggest that the most robust TFP growth determinants are time-invariant unobserved heterogeneity and trade openness. We also investigate the main determinants of two TFP components: efficiency change (i.e., catching up) and technological progress. Copyright Springer-Verlag Berlin Heidelberg 2014

Keywords: Bayesian model averaging; Productivity; Nonparametric methods; O47; C11; C14; C23 (search for similar items in EconPapers)
Date: 2014
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Citations: View citations in EconPapers (30)

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DOI: 10.1007/s00181-013-0737-y

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