Working Paper: CEPR ID: DP8631
Authors: Dani Rodrik
Abstract: Unlike economies as a whole, manufacturing industries exhibit unconditional convergence in labor productivity. The paper documents this finding for 4-digit manufacturing sectors for a large group of developed and developing countries over the period since 1990. The coefficient of unconditional convergence is estimated quite precisely and is large, at 3.0-5.6 percent per year depending on the estimation horizon. The result is robust to a large number of specification tests, and statistically highly significant. Because of data coverage, these findings should be as viewed as applying to the organized, formal parts of manufacturing.
Keywords: convergence; growth
JEL Codes: O4
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| initial conditions, industry characteristics, and structural factors (L16) | productivity growth (O49) |
| unconditional convergence in manufacturing (L69) | overall economic performance (P47) |
| initial labor productivity (J24) | subsequent growth rates (O41) |
| lower initial productivity levels (O49) | more rapid growth (O49) |