How do physical capital accumulation and total factor productivity (TFP) individually add to economic growth? We approach this question from the perspective of the quality of physical capital and labor, namely the age of physical capital and human capital. We build a unique dataset by explicitly calculating the age of physical capital for each country and each year of our time frame and estimate a stochastic frontier production function incorporating input quality in five regions of countries (Africa, East Asia, Latin America, South Asia and West). Physical capital accumulation generally proves much more important than either the improved quality of factors or TFP growth in explaining output growth. The age of capital decreases growth in all regions except in Africa, while human capital increases growth in all regions except in East Asia.

Output Growth Decomposition in the Presence of Input Quality Effects: A Stochastic Frontier Approach / Rim Limam, Yasmina; Miller, Stephen M.; Garzarelli, Giampaolo. - In: GERMAN ECONOMIC REVIEW. - ISSN 1468-0475. - ELETTRONICO. - 20:4(2019), pp. 383-409. [10.1111/geer.12147]

Output Growth Decomposition in the Presence of Input Quality Effects: A Stochastic Frontier Approach

Giampaolo Garzarelli
2019

Abstract

How do physical capital accumulation and total factor productivity (TFP) individually add to economic growth? We approach this question from the perspective of the quality of physical capital and labor, namely the age of physical capital and human capital. We build a unique dataset by explicitly calculating the age of physical capital for each country and each year of our time frame and estimate a stochastic frontier production function incorporating input quality in five regions of countries (Africa, East Asia, Latin America, South Asia and West). Physical capital accumulation generally proves much more important than either the improved quality of factors or TFP growth in explaining output growth. The age of capital decreases growth in all regions except in Africa, while human capital increases growth in all regions except in East Asia.
2019
Age of physical capital, embodiment hypothesis, output growth, stochastic frontier, total factor productivity
01 Pubblicazione su rivista::01a Articolo in rivista
Output Growth Decomposition in the Presence of Input Quality Effects: A Stochastic Frontier Approach / Rim Limam, Yasmina; Miller, Stephen M.; Garzarelli, Giampaolo. - In: GERMAN ECONOMIC REVIEW. - ISSN 1468-0475. - ELETTRONICO. - 20:4(2019), pp. 383-409. [10.1111/geer.12147]
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Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/11573/1030474
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