Empirical Economics

, Volume 47, Issue 1, pp 227–251 | Cite as

TFP growth and its determinants: a model averaging approach

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

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 averaging Productivity Nonparametric methods 

JEL Codes

O47 C11 C14 C23 

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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

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