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N° 2004-02 |
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| February 2004 |
| Technology Differences, Institutions
and Economic Growth: a Conditional Conditional Convergence |
| Hervé Boulhol |
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| Highlighting that technology is only a component of productivity, this study focuses on the interactions between institutions and technology differences to explain cross-country growth pattern. Three complementary channels through which institutions impact growth are identified: efficiency in the use of technology, long term TFP-growth and technology diffusion. From a new and detailed database on institutions developed by the French Ministry of Economy, Finance and Industry, poor institutional quality, beyond human capital, is estimated to be the source of an annual growth-rate loss of between 2.4 and 6.1 percentage point for half of the countries. Technology diffusion speed is institutionally related and the distance to the technology frontier is reduced from 0% to 12.4% annually depending on the country. Trade has a non linear influence on growth, being significant only for countries already advanced in the development phase. Conditional convergence here is also conditional to sharing the same technology and quality of institutions, rendering recent observed divergence well accounted for. |
Abstract |
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| Technology diffusion; Institutions; Productivity; Growth |
Keywords |
| O11; O33; O47 |
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