- Structural development accounting
- Gino Gancia, Andreas Müller and Fabrizio Zilibotti
- July 2010 (Revised: February 2011)
- We construct and estimate a unified model combining three of the main sources of
cross-country income disparities: differences in factor endowments, barriers to technology
adoption and the inappropriateness of frontier technologies to local conditions. The key
components are different types of workers, distortions to capital accumulation, directed
technical change, costly adoption and spillovers from the world technology frontier. Despite
its parsimonious parametrization, our empirical model provides a good fit of GDP data for
up to 86 countries in 1970 and 122 countries in 2000. Removing barriers to technology
adoption would increase the output per worker of the average non-OECD country relative
to the US from 0.19 to 0.61, while increasing skill premia in all countries. Removing barriers
to trade in goods amplifies income disparities, induces skill-biased technology adoption
and increases skill premia in the majority of countries. These results are reverted if trade
liberalization is coupled with international IPR protection.
- Directed Technology Adoption, Development Accounting, Distance to Frontier, Inappropriate Technologies, Skill-biased Technical Change, Productivity, TFP differences.
- JEL codes:
- F43, O11, O31, O33, O38, O41, O43, O47.
- Area of Research:
- Macroeconomics and International Economics
- Published in:
- Advances in Economics and Econometrics: Theory and Applications, D. Acemoglu, M. Arellano and E. Dekel (eds.),Tenth World Congress of the Econometric Society (Econometric Society Monographs), vol. II, 2013.
Download the paper in PDF format (493 Kb)