Growth, Trade and Endogenous Technology: A Study of OECD Manufacturing

212 Pages·1996·50.815 MB·English

by  Orlando A. Ochoa (auth.)

GROWTH, TRADE AND ENDOGENOUS
TECHNOLOGY

Growth, Trade and
Endogenous Technology
A Study of OECD Manufacturing
Orlando A. Ochoa
Lecturer ill Erollomics
Imlilllio de ESludor SUI'eriores de Adminis/racion
Camca.I', Venezuela
FiTS! published in G~al Britain 1996 by
MACMILLAN PRESS LTD
Houndmills, Basingsloke, lIampshire RG21 6XS
and u>ndon
Companies and representatives
throughoUi the world
A calalogue r« ord for this blM>k is available
from the British Library.
ISBN 978-1-349-39659-7 ISBN 978-0-230-37778-3 (eBook)
DOI 10.1057/9780230377783
rirst published in the United Stales of America 1996 by
S1', MARTIN'S PRESS, INC.,
Scholarly and Reference Division.
175 Fifth Avenue,
New York, N.Y. lOOtO
ISBN 978.(J·312·15845·3
Library of Congress Cataloging·in·Publication Data
Ochoa, Orlando A.
Growth, lrade and emlugenous lechnulugy: a SllJdy ufOECD
manufacturing I Orlando A. tkhoa.
p. em.
The ~sult of the authur's dvctnr~1 research al Brasenose evllcgc,
Oxfurd_
Includes bibliographical refereoces and index.
ISBN 9711..Q-J t2-1 51145-3 (cloth)
1. Manufactures-Econometric models. 2. Organizati()n fur £Conumic
Coopcr~lion and Development_ I. Title.
HD9720.5.02S 1996
J38.4'767--dc20 96-4259
CIP
C> Orlando A. Ochoa 1996
All rights reserved, No reproduction, copy Or Iransmissi,m of
this publication may be made without writtcn pemlissiun.
No paragraph uf Ihis pUblicatiun may be reproduced. copied or
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tile provi~ions of the Copyright, Designs and Patents Act 1998,
or under the tenns of any licence perrniuing limited copying
issued by lhe Cupyright Licensing Agency. 90 Tottenham Cuun
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Any person who docs any unauthorised act in relation to this
piblication may ~ liable 10 crimina! prosecution and civil
claims for damages.
10 9 8 7 6 5 4 3 2 1
05 04 03 02 01 00 99 98 97 96
To my parents
To Charo

Contents
List o/Tables IX
Ackllowledgemems Xl!
Tnt['oduction: Growth and Endogenous Technology
1.1 Background I
1.2 Objectives of the Book 4
[.3 Structure of the Book 6
2 The New Theories of Endogenous Growth 8
2.1 From the neoclassical growth model to the Lucas-Romer
approach R
2.2 Growlh with endogenous technological change:
Inc Romer model r 2
2.3 The growth-trade link in the Romer model 16
3 The Issues, the Empirical Approach and the Data 19
3.1 The Romer model: fundamental issues and empirical
predictions 20
3.2 An empirical specification 20
3.3 Statistical and methodological issues in cross-country
growth analysis 31
3.4 The manufacturing sector's performance. research
effort and human capital: characteristics of the data 35
4 Modelling Output Growth Across Manufacturing $eclOrs:
An Initial Approach 47
4.1 The sample. the data and the variables 48
4.2 The contribution of capital to output growth in the basic
neoclassical model 55
4.3 Capital, technology and output growth: a lirst approach 60
4.4 Summary of the findings and their implications 69
5 Evidence of Endogenous Technological Change Across
OECD Manufacturing 71
5.1 The interaction between capital and sources of endogenous
technology: the Romer model 71
vii
viii Contents
5.2 Some mode! specification tests: the role of trade and other
competing hypotheses 85
5.3 Summary of the findings and their implications 92
6 Research Human Capital, Investment and Trade: Further
Empirical Evidence 96
6.1 Kesearch activities, human capital, and the catching-up
hypothesis 97
6.2 Empirical determinants of Ihc pauern of investment across
manufacturing sectors 105
6.3 The pallern of trade and the sources of comparative
advantage: a long-run approach 108
6.4 Endogenous technology, human capital and Ihe patterns
of investment and trade: findings and implications 119
7 The Impact of Government Policy on Output Growth
Across OECD Manufacturing 124
7.1 An empirical assessment of the impact of national
technology policy on output growth in manufacturing 126
7.2 Infrastructure and output growth in manufacturing 133
7.3 Mal;IlX;CUUUJuic policy anu output g,owth iu
manufacturing 139
7.4 Policy issues: findings and implications 145
8 Conclusions 148
8.1 The empirical findings 148
8.2 The broader interprctation 156
Appendix J: Data Sources and Variable.s 159
Appendix 2: Further Econometric Result.s 165
Appendix 3: Descriptive Stati.fties 170
Notes 174
References 188
Index 195
List of Tables
3.1 Sectoral share of IOtal manufacturing in the aggregate
10lals of the sample of II DECO countries 39
3.2 Economic indicators for the manufacturing groups in the
subsample of G-5 countries 41
3.3 Economic indicators for the manufacturing groups in
the subsampJc ofG-O countries 42
3.4 Percentage share of professional, technical and related
workers in the labour force at country level and the
annual rate of change 45
3.5 Percentage share of administrative, executive and
managerial workers in the labour force at country level 46
4.1 The contributions of alternative measures of capital
to growth: cross-section estimates across OECD
manufacturing 57
4.2 Simple extension of the neoclassical growth model:
cross-section estimates across QECD manufacturing 61
4.3 Descriptive statistics on variables in low-investment and
high-investment subsamples of manufacturing sectors 66
5.1 The Romer growth model: cross-section estimates
across OECD manufacturing 73
5.2 Descriptive statistics on the partial coefficients of elasticity
for GK. LRSE and LRSERW as predicted by growth
equations 1-3 in Table 5.1: subsamples by groups
of countries 80
5.3 Descriptive statistics on the partial coefficients of
elasticity for GK and LRSE as predicted by growth
equations \-3 in Table 5.1: subsamples by manufacturing
sector 81
5.4 Mean values and standard deviations for selected variables
according to subsamples. by manufacturing activities 83
5.5 Some tests on the robustness of growth estimates across
OECD manufacturing 87
5.6 Results of further tests on the robustness of growth
estimates across OECD manufacturing 90
6.1 Estimates of the detenninants of the rate of change in
scientific human capital employed across OECD
manufacturing, 1970-87 98
"