Working Paper: CEPR ID: DP7032
Authors: Eric J. Bartelsman; Jonathan Haskel; Ralf Martin
Abstract: An extensive literature on the convergence of productivity between countries examines whether productivity is pulled towards the global frontier country, perhaps due to learning and knowledge spillovers. More recently, studies within countries use the wide dispersion of productivity across firms to explore convergence to the national frontier. Given this within-country dispersion however between country-dispersion is hard to interpret, for it is quite possible that the best firms in a laggard average country are above at least some firms in a leading average country. This paper therefore uses micro data sets across many countries to build better measures of global and national frontiers and firms? distance from them. Using UK data, we then find that (a) the national frontier exerts a stronger pull on domestic firms than does the global frontier and (b) the pull from the global frontier falls with technological distance, while the pull from the national frontier does not. This result suggests that firms might lag so far technologically that they cannot learn from the global frontier, while they still are able to benefit from domestic knowledge.
Keywords: convergence; distance to frontier; productivity; spillovers
JEL Codes: J24; O47; O57
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| national productivity frontier (O49) | firm productivity (D22) |
| global productivity frontier (O47) | firm productivity (D22) |
| technological distance from global frontier (O30) | learning opportunities (J24) |
| technological distance from global frontier (O30) | firm productivity (D22) |
| firm productivity levels (D22) | response to national vs global frontiers (F59) |