Research Discussion Papers, Bank of Finland
No 13/2008:
Why do growth rates differ? Evidence from cross-country data on private sector production
Juha Kilponen ()
and Matti Viren ()
Abstract: We estimate a standard production function with a new
cross-country data set on business sector production, wages and R&D
investment for a selection of 14 OECD countries including the United
States. The data sample covers the years 1960–2004. The data suggest that
growth differences can largely be explained by capital deepening and an
ability to produce new technology in the form of new patents. The
importance of patents is magnified by the openness of the economy. We find
some evidence of increasing elasticity of substitution over time, all
though the results are sensitive to assumptions on the nature of
technological progress.
Keywords: growth; R&D; production function; patents; (follow links to similar papers)
JEL-Codes: E10; O40; O43; (follow links to similar papers)
29 pages, May 19, 2008
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