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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 

Notes

Acknowledgments

We would like to thank Atsu Amegashie, Cristian Bartolucci, Joan Llull, and Jonathan Temple for helpful comments and suggestions. We also thank an Associate Editor and two anonymous referees for insightful suggestions that led to a substantial improvement of the paper.

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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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