Working Paper: NBER ID: w17546
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; Labor Productivity; Manufacturing Industries
JEL Codes: O1; O4
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Country-specific conditions (F29) | Speed of convergence (C69) |
| Distance from technology frontier (O49) | Convergence rate (O47) |
| Structural factors and resource allocation (H10) | Overall economic convergence (F62) |
| Initial levels of labor productivity (O49) | Subsequent growth rates (O41) |
| Unconditional convergence (C62) | Manufacturing industries (L69) |