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INNOVATION, IMITATION, AND THE NATURE OF ECONOMIC GROWTH

Year 2018, Volume: 2 Issue: 2, 137 - 161, 15.10.2018
https://doi.org/10.24954/JORE.2018.20

Abstract

This study demonstrates that the evolution of aggregate productivity in an economy, relative to a technology frontier such as the United States, determines the nature of economic growth for this economy, i.e., whether growth is driven primarily by innovation or imitation. The estimating equation is an autoregressive one and is structural in the sense that it identifies innovation and imitation parameters of an economy. The estimates for 85 countries that use UNIDO’s relative productivity data for the period of 1960-2000 show that there exists an innovation-imitation curve over which countries with superior productivity growth performance are located, i.e., a growth frontier. The distance from this growth frontier for a country is a two-dimensional measure of how poorly this country performs with respect to productivity growth. Interestingly, countries in both groups, i.e., the ones located over the growth frontier and define it and the others located away, exhibit considerable within-group variation in terms of innovation and imitation parameters.

References

  • Abramovitz, M. (1986). Catching Up, Forging Ahead, and Falling Behind. Journal of Economic History, 46(2): 385–406.
  • Acemoglu, D., Aghion, P. and Zilibotti, F. (2006). Distance to Frontier, Selection, and Economic Growth. Journal of the European Economic Association, 4(1): 37–74.
  • Azariadis, C. and Drazeni A. (1990). Threshold Externalities in Economic Development. Quarterly Journal of Economics, 105(2): 501–526.
  • Barro, R. J. (1991). Economic Growth in a Cross Section of Countries. The Quarterly Journal of Economics, 106(2): 407–443.
  • Barro, R. J. and Sala-i Martin, X. (1992). Convergence. Journal of Political Economy, 100(2): 223– 251.
  • Baumol, W. J. (1986). Productivity Growth, Convergence, and Welfare: What the Long-run Data Show. American Economic Review, 76(5): 1072–1085.
  • Becker, G. S., Murphy K. M. and Tamura R. (1990). Human capital, Fertility, and Economic Growth. Journal of Political Economy, 98(5): S12–S37.
  • Benhabib, J. and Spiegel, M. M. (2005). Human Capital and Technology Diffusion. In: Philippe Aghion and Steven N. Durlauf (Eds), Handbook of Economic Growth, 935–966 Amsterdam: Elsevier.
  • Bianchi, M. (1997). Testing for Convergence: Evidence from Non-Parametric Multimodality Tests. Journal of Applied Econometrics, 12(4): 393–409.
  • Bos, J., Economidou, M., Koette, M. and Kolar, J. (2010). Do All Countries Grow Alike? Journal of Development Economics, 91(1): 113–127.
  • Castellacci, F. (2008). Technology Clubs, Technology Gaps and Growth Trajectories. Structural Change and Economic Dynamics, 19(4): 301–314.
  • Clark, G. (2007). A Farewell to Alms: A Brief Economic History of the World. Princeton: Princeton University Press.
  • Cohen, W. M. and Levinthal D. A. (1989). Innovation and Learning: The Two Faces of R & D. Economic Journal, 99(397): 569–596.
  • Cohen, W. M. and Levinthal, D. A. (1990). Absorptive Capacity: A New Perspective on Learning and Innovation. Administrative Science Quarterly, 35(1): 128–152.
  • DeLong, J. B. (1988). Productivity Growth, Convergence, and Welfare: Comment. American Economic Review, 78(5): 1138–1154.
  • Denison, E. F. (1961). The sources of economic growth in the United States. New York: Committee for Economic Development.
  • Desdoigts, A. (1999). Patterns of Economic Development and the Formation of Clubs. Journal of Economic Growth, 4(3): 305–330.
  • Durlauf, S. N. and Johnson, P. A. (1995). Multiple Regimes and Cross-Country Growth Behaviour. Journal of Applied Econometrics, 10(4): 365–384.
  • Feenstra, R. C., Inklaar, R. and Timmer, M. P. (2015). The Next Generation of the Penn World Table. American Economic Review, 105(10): 3150–3182.
  • Fiaschi, D. and Lavezzi, A. M. (2003). Distribution Dynamics and Nonlinear Growth. Journal of Economic Growth, 8(4): 379–401.
  • Friedman, M. (1992). Do Old Fallacies Ever Die? Journal of Economic Literature, 30(4): 2129–2132.
  • Galor, O. (1996). Convergence? Inferences from Theoretical Models. Economic Journal, 106(437): 1056–1069.
  • Galor, O. (2010). The 2008 Lawrence R. Klein Lecture-Comparative Economic Development: Insights from Unified Growth Theory. International Economic Review, 51(1): 1–44.
  • Galor, O. (2011) Unified Growth Theory. Princeton: Princeton University Press.
  • Galor, O. and Weil, D. N. (2000). Population, Technology, and Growth: From Malthusian Stagnation to the Demographic Transition and Beyond. American Economic Review, 90(4): 806–828.
  • Gerschenkron, A. (1962). Economic Backwardness in Historical Perspective: A Book of Essays. Cambridge, MA: Belknap Press.
  • Gomulka, S. (1971). Inventive Activity, Diffusion, and the Stages of Economic Growth. Aarhus, Denmark: Institute of Economics.
  • Graham, B. and Temple, J. (2006). Rich Nations, Poor Nations: How Much Can Multiple Equilibria Explain? Journal of Economic Growth, 11(1): 5–41.
  • Isaksson, A. (2007). World productivity database: A Technical Description, RST Staff Working Paper, 2007/10, Vienna: UNIDO.
  • Jones, E. L. (1981). The European Miracle: Environments, Economies, and Geopolitics in the History of Europe and Asia. Cambridge: Cambridge University Press.
  • Kneller, R. and Stevens, P. A. (2006). Frontier Technology and Absorptive Capacity: Evidence from OECD Manufacturing Industries. Oxford Bulletin of Economics and Statistics, 68(1): 1–21.
  • Kormendi, R. C. and Meguire, P. G. (1985). Macroeconomic Determinants of Growth: Cross Country Evidence. Journal of Monetary Economics, 16(2): 141–163.
  • Landes, D. S. (1969). The Unbound Prometheus: Technological Change and Industrial Development in Western Europe from 1750 to the Present. Cambridge: Cambridge University Press.
  • Levine, R. and Renelt, D. (1992). A Sensitivity Analysis of Cross-Country Growth Regressions. American Economic Review, 82(4): 942–963.
  • Lucas, R. E. (2000). Some Macroeconomics for the 21st Century. Journal of Economic Perspectives, 14(1): 159–168.
  • Lucas, R. E. (2009). Trade and the Diffusion of the Industrial Revolution. American Economic Journal: Macroeconomics, 1(1): 1–25.
  • Mankiw, N. G., Romer, D. and Weil, D. N. (1992). A Contribution to the Empirics of Economic Growth. Quarterly Journal of Economics, 107(2): 407–437.
  • Sala-i-Martin, X. (1997). I Just Ran Two Million Regressions. American Economic Review, 87(2): 178–183.
  • Milanovic, B. (2010). The ricardian vice: Why Sala-i-Martin’s Calculations of World Income Inequality are Wrong, World Bank, Development Economics Research Group
  • Mokyr, J. (2002). The Gifts of Athena: Historical Origins of the Knowledge Economy. Princeton: Princeton University Press.
  • Nelson, R.R. and Phelps, E.S. (1966). Investment in Humans, Technological Diffusion, and Economic growth. American Economic Review, 56(1/2): 69–75.
  • Owen, A., Videras, J. and Davis, L. (2009). Do all Countries Follow the Same Growth Process? Journal of Economic Growth, 14(4): 265–286.
  • Peretto, P. F. (2016). Robust Endogenous Growth, Working Paper.
  • Quah, D. (1993). Galton’s Fallacy and Tests of the Convergence Hypothesis. Scandinavian Journal of Economics, 95(4): 427–443.
  • Quah, D. (1996). Twin Peaks: Growth and Convergence in Models of Distribution Dynamics. Economic Journal, 106(437): 1045–1055.
  • Quah, D. (1997). Empirics for Growth and Distribution: Stratification, Polarization, and Convergence Clubs. Journal of Economic Growth, 2(1): 27–59.
  • Rogers, M. (2004). Absorptive Capability and Economic growth: How do Countries Catch-up? Cambridge Journal of Economics, 28(4): 577–596.
  • Romer, P. (1993). Idea Gaps and Object Gaps in Economic Development. Journal of Monetary Economics, 32(3): 543–573.
  • Solow, R. M. (1956). A Contribution to the Theory of Economic Growth. The Quarterly Journal of Economics, 70(1): 65–94.
  • Solow, R. M. (1957). Technical Change and the Aggregate Production Function. The Review of Economics and Statistics, 39(3): 312–320.
  • Veblen, T. (1915). Imperial Germany and the Industrial Revolution. Akron, OH: Macmillian Publishers.
  • Verspagen, B. (1991). A new Empirical Approach to Catching up or Falling Behind. Structural Change and Economic Dynamics, 2(2): 359–380.

YENİLİK, TAKLİT VE İKTİSADİ BÜYÜMENİN DOĞASI

Year 2018, Volume: 2 Issue: 2, 137 - 161, 15.10.2018
https://doi.org/10.24954/JORE.2018.20

Abstract

Bu çalışma, bir ekonomideki bütüncül verimliliğin Birleşik Devletler gibi bir teknoloji uçsınırına göreli olarak evriminin, o ekonomi için iktisadi büyümenin doğasını belirlediğini göstermektedir, yani büyümenin birincil olarak yenilik ile mi yoksa taklit ile mi gerçekleştiğini. Tahmin eden denklem otoregresiftir ve bir ekonomi için yenilik ve taklit katsayılarını belirlemesi bakımından yapısaldır. 85 ülke için UNIDO’nun 1960-2000 dönemine ait göreli verimlilik verisini kullanan tahminler, daha iyi verimlilik büyümesi performansı gösteren ülkelerin, bir yenilik-taklit eğrisi tanımladığını ortaya koymaktadır, yani bir büyüme uçsınırı. Bu büyüme uçsınırına olan uzaklık, bir ülkenin verimlilik büyümesi bakımından ne denli zayıf bir performans gösterdiğinin iki boyutlu bir ölçüsüdür. İlginç biçimde, her iki gruptaki ülkeler, yani büyüme uçsınırında yerleşmiş ve onu tanımlamış olanlar ile buradan uzaktakiler, yenilik ve taklit parametreleri bakımından, dikkate değer grup-içi değişkenlik göstermektedirler.

References

  • Abramovitz, M. (1986). Catching Up, Forging Ahead, and Falling Behind. Journal of Economic History, 46(2): 385–406.
  • Acemoglu, D., Aghion, P. and Zilibotti, F. (2006). Distance to Frontier, Selection, and Economic Growth. Journal of the European Economic Association, 4(1): 37–74.
  • Azariadis, C. and Drazeni A. (1990). Threshold Externalities in Economic Development. Quarterly Journal of Economics, 105(2): 501–526.
  • Barro, R. J. (1991). Economic Growth in a Cross Section of Countries. The Quarterly Journal of Economics, 106(2): 407–443.
  • Barro, R. J. and Sala-i Martin, X. (1992). Convergence. Journal of Political Economy, 100(2): 223– 251.
  • Baumol, W. J. (1986). Productivity Growth, Convergence, and Welfare: What the Long-run Data Show. American Economic Review, 76(5): 1072–1085.
  • Becker, G. S., Murphy K. M. and Tamura R. (1990). Human capital, Fertility, and Economic Growth. Journal of Political Economy, 98(5): S12–S37.
  • Benhabib, J. and Spiegel, M. M. (2005). Human Capital and Technology Diffusion. In: Philippe Aghion and Steven N. Durlauf (Eds), Handbook of Economic Growth, 935–966 Amsterdam: Elsevier.
  • Bianchi, M. (1997). Testing for Convergence: Evidence from Non-Parametric Multimodality Tests. Journal of Applied Econometrics, 12(4): 393–409.
  • Bos, J., Economidou, M., Koette, M. and Kolar, J. (2010). Do All Countries Grow Alike? Journal of Development Economics, 91(1): 113–127.
  • Castellacci, F. (2008). Technology Clubs, Technology Gaps and Growth Trajectories. Structural Change and Economic Dynamics, 19(4): 301–314.
  • Clark, G. (2007). A Farewell to Alms: A Brief Economic History of the World. Princeton: Princeton University Press.
  • Cohen, W. M. and Levinthal D. A. (1989). Innovation and Learning: The Two Faces of R & D. Economic Journal, 99(397): 569–596.
  • Cohen, W. M. and Levinthal, D. A. (1990). Absorptive Capacity: A New Perspective on Learning and Innovation. Administrative Science Quarterly, 35(1): 128–152.
  • DeLong, J. B. (1988). Productivity Growth, Convergence, and Welfare: Comment. American Economic Review, 78(5): 1138–1154.
  • Denison, E. F. (1961). The sources of economic growth in the United States. New York: Committee for Economic Development.
  • Desdoigts, A. (1999). Patterns of Economic Development and the Formation of Clubs. Journal of Economic Growth, 4(3): 305–330.
  • Durlauf, S. N. and Johnson, P. A. (1995). Multiple Regimes and Cross-Country Growth Behaviour. Journal of Applied Econometrics, 10(4): 365–384.
  • Feenstra, R. C., Inklaar, R. and Timmer, M. P. (2015). The Next Generation of the Penn World Table. American Economic Review, 105(10): 3150–3182.
  • Fiaschi, D. and Lavezzi, A. M. (2003). Distribution Dynamics and Nonlinear Growth. Journal of Economic Growth, 8(4): 379–401.
  • Friedman, M. (1992). Do Old Fallacies Ever Die? Journal of Economic Literature, 30(4): 2129–2132.
  • Galor, O. (1996). Convergence? Inferences from Theoretical Models. Economic Journal, 106(437): 1056–1069.
  • Galor, O. (2010). The 2008 Lawrence R. Klein Lecture-Comparative Economic Development: Insights from Unified Growth Theory. International Economic Review, 51(1): 1–44.
  • Galor, O. (2011) Unified Growth Theory. Princeton: Princeton University Press.
  • Galor, O. and Weil, D. N. (2000). Population, Technology, and Growth: From Malthusian Stagnation to the Demographic Transition and Beyond. American Economic Review, 90(4): 806–828.
  • Gerschenkron, A. (1962). Economic Backwardness in Historical Perspective: A Book of Essays. Cambridge, MA: Belknap Press.
  • Gomulka, S. (1971). Inventive Activity, Diffusion, and the Stages of Economic Growth. Aarhus, Denmark: Institute of Economics.
  • Graham, B. and Temple, J. (2006). Rich Nations, Poor Nations: How Much Can Multiple Equilibria Explain? Journal of Economic Growth, 11(1): 5–41.
  • Isaksson, A. (2007). World productivity database: A Technical Description, RST Staff Working Paper, 2007/10, Vienna: UNIDO.
  • Jones, E. L. (1981). The European Miracle: Environments, Economies, and Geopolitics in the History of Europe and Asia. Cambridge: Cambridge University Press.
  • Kneller, R. and Stevens, P. A. (2006). Frontier Technology and Absorptive Capacity: Evidence from OECD Manufacturing Industries. Oxford Bulletin of Economics and Statistics, 68(1): 1–21.
  • Kormendi, R. C. and Meguire, P. G. (1985). Macroeconomic Determinants of Growth: Cross Country Evidence. Journal of Monetary Economics, 16(2): 141–163.
  • Landes, D. S. (1969). The Unbound Prometheus: Technological Change and Industrial Development in Western Europe from 1750 to the Present. Cambridge: Cambridge University Press.
  • Levine, R. and Renelt, D. (1992). A Sensitivity Analysis of Cross-Country Growth Regressions. American Economic Review, 82(4): 942–963.
  • Lucas, R. E. (2000). Some Macroeconomics for the 21st Century. Journal of Economic Perspectives, 14(1): 159–168.
  • Lucas, R. E. (2009). Trade and the Diffusion of the Industrial Revolution. American Economic Journal: Macroeconomics, 1(1): 1–25.
  • Mankiw, N. G., Romer, D. and Weil, D. N. (1992). A Contribution to the Empirics of Economic Growth. Quarterly Journal of Economics, 107(2): 407–437.
  • Sala-i-Martin, X. (1997). I Just Ran Two Million Regressions. American Economic Review, 87(2): 178–183.
  • Milanovic, B. (2010). The ricardian vice: Why Sala-i-Martin’s Calculations of World Income Inequality are Wrong, World Bank, Development Economics Research Group
  • Mokyr, J. (2002). The Gifts of Athena: Historical Origins of the Knowledge Economy. Princeton: Princeton University Press.
  • Nelson, R.R. and Phelps, E.S. (1966). Investment in Humans, Technological Diffusion, and Economic growth. American Economic Review, 56(1/2): 69–75.
  • Owen, A., Videras, J. and Davis, L. (2009). Do all Countries Follow the Same Growth Process? Journal of Economic Growth, 14(4): 265–286.
  • Peretto, P. F. (2016). Robust Endogenous Growth, Working Paper.
  • Quah, D. (1993). Galton’s Fallacy and Tests of the Convergence Hypothesis. Scandinavian Journal of Economics, 95(4): 427–443.
  • Quah, D. (1996). Twin Peaks: Growth and Convergence in Models of Distribution Dynamics. Economic Journal, 106(437): 1045–1055.
  • Quah, D. (1997). Empirics for Growth and Distribution: Stratification, Polarization, and Convergence Clubs. Journal of Economic Growth, 2(1): 27–59.
  • Rogers, M. (2004). Absorptive Capability and Economic growth: How do Countries Catch-up? Cambridge Journal of Economics, 28(4): 577–596.
  • Romer, P. (1993). Idea Gaps and Object Gaps in Economic Development. Journal of Monetary Economics, 32(3): 543–573.
  • Solow, R. M. (1956). A Contribution to the Theory of Economic Growth. The Quarterly Journal of Economics, 70(1): 65–94.
  • Solow, R. M. (1957). Technical Change and the Aggregate Production Function. The Review of Economics and Statistics, 39(3): 312–320.
  • Veblen, T. (1915). Imperial Germany and the Industrial Revolution. Akron, OH: Macmillian Publishers.
  • Verspagen, B. (1991). A new Empirical Approach to Catching up or Falling Behind. Structural Change and Economic Dynamics, 2(2): 359–380.
There are 52 citations in total.

Details

Primary Language English
Subjects Business Administration
Journal Section Makaleler
Authors

M. Aykut Attar

Publication Date October 15, 2018
Published in Issue Year 2018 Volume: 2 Issue: 2

Cite

APA Attar, M. A. (2018). INNOVATION, IMITATION, AND THE NATURE OF ECONOMIC GROWTH. Journal of Research in Economics, 2(2), 137-161. https://doi.org/10.24954/JORE.2018.20