Empirical Economics

, Volume 47, Issue 1, pp 227–251

TFP growth and its determinants: a model averaging approach

  • Michael Danquah
  • Enrique Moral-Benito
  • Bazoumana Ouattara
Article

DOI: 10.1007/s00181-013-0737-y

Cite this article as:
Danquah, M., Moral-Benito, E. & Ouattara, B. Empir Econ (2014) 47: 227. doi:10.1007/s00181-013-0737-y

Abstract

Total Factor Productivity (TFP) accounts for a sizable proportion of the income differences across countries. Two challenges remain to researchers aiming to explain these differences: on the one hand, TFP growth is hard to measure empirically; on the other hand, model uncertainty hampers consensus on its key determinants. This paper combines a non-parametric measure of TFP growth with Bayesian model averaging techniques in order to address both issues. Our empirical findings suggest that the most robust TFP growth determinants are time-invariant unobserved heterogeneity and trade openness. We also investigate the main determinants of two TFP components: efficiency change (i.e., catching up) and technological progress.

Keywords

Bayesian model averagingProductivityNonparametric methods

JEL Codes

O47C11C14C23

Copyright information

© Springer-Verlag Berlin Heidelberg 2013

Authors and Affiliations

  • Michael Danquah
    • 1
  • Enrique Moral-Benito
    • 2
  • Bazoumana Ouattara
    • 3
  1. 1.GIMPAAccraGhana
  2. 2.Banco de EspañaMadridSpain
  3. 3.Swansea UniversitySwanseaUK