nep-gro New Economics Papers
on Economic Growth
Issue of 2018‒12‒10
nine papers chosen by
Marc Klemp
University of Copenhagen

  1. Geographical Roots of the Coevolution of Cultural and Linguistic Traits By Oded Galor; Ömer Özak; Assaf Sarid
  2. Immigration and Innovation By Michael Landesmann; Sandra M. Leitner
  3. Non-Balanced Endogenous Growth and Structural Change: When Romer Meets Kaldor and Kuznets By Christian Ghiglino; Kazuo Nishimura; Alain Venditti
  4. International Capital Flows in Club of Convergence By Ly-Dai, Hung
  5. Does the size of the informal economy impede the impact of remittances on economic growth? Evidence from Sub-Saharan African countries By Njangang, Henri
  6. Human Capital, Knowledge Creation, Knowledge Diffusion, Institutions and Economic Incentives: South Korea versus Africa By Simplice A. Asongu; Vanessa S. Tchamyou
  7. Privatization and growth: natural experiments of European economies in transition By Kant, Chander
  8. Drivers of Growth in Fast Emerging Economies: a Dynamic Instrumental Quantile Approach to Real Output and its Rates of Growth in BRICS and MINT countries, 2001-2011 By Simplice A. Asongu; Nicholas M. Odhiambo
  9. Introduction to Disease, Human Health, and Regional Growth and Development in Asia By Batabyal, Amitrajeet; Higano, Yoshiro; Nijkamp, Peter

  1. By: Oded Galor (Brown University); Ömer Özak (Southern Methodist University); Assaf Sarid (Brown University)
    Abstract: This research explores the geographical origins of the coevolution of cultural and linguistic traits in the course of human history, relating the geographical roots of long-term orientation to the structure of the future tense, the agricultural determinants of gender bias to the presence of sex-based grammatical gender, and the ecological origins of hierarchical orientation to the existence of politeness distinctions. The study advances the hypothesis and establishes empirically that: (i) geographical characteristics that were conducive to higher natural return to agricultural investment contributed to the existing cross-language variations in the structure of the future tense, (ii) the agricultural determinants of gender gap in agricultural productivity fostered the existence of sex-based grammatical gender, and (iii) the ecological origins of hierarchical societies triggered the emergence of politeness distinctions.
    Keywords: Comparative Development, Cultural Evolution, Language Structure, Future Tense, Politeness Distinctions, Long-Term Orientation, Grammatical Gender, Gender Bias, Hierarchy, Emergence of States
    JEL: D01 D03 I25 J16 J24 O1 O10 O11 O12 O40 O43 O44 Z10 Z13
    Date: 2018–01
  2. By: Michael Landesmann (The Vienna Institute for International Economic Studies, wiiw); Sandra M. Leitner (The Vienna Institute for International Economic Studies, wiiw)
    Abstract: Do High-Skilled Third-Country (i.e. Non-EU) Migrants Contribute to Productivity Growth? In order to foster innovation and enhance economic development and growth, attracting skilled professionals from abroad has become an important policy goal in many economies, initiating a global race for talent. This paper looks at the private company sector in a group of 13 old EU Member States and examines the role of high-skilled third-country (HS-TC) migrants for innovation – as captured by real labour productivity and total factor productivity (TFP) growth – between 2004 and 2015. It utilises four different indicators of HS-TC migration and defines high skills in terms of either educational attainment (ISCED classification) or the skills required in an occupation (ISCO classification) which helps identify the presence of a jobs-skills mismatch for HS-TC migrants. Taking into account the endogenous nature of HS-TC migration, we find some selective evidence of a negative causal link between the share of HS‑TC migrants, on the one hand, and labour productivity and TFP growth, on the other. Furthermore, differences in the results for the ISCED- and ISCO-based skills measures point to a non-negligible jobs‑skills mismatch in terms of an over-representation of HS-TC migrants in lower productivity occupations. We also find that HS-TC migrants are relatively less productive than HS EU migrants. Results for selected individual industries are more mixed, with some industries even benefiting in productivity terms from a higher share of HS-TC migrant workers.
    Keywords: high-skilled third-country migrants, innovation, EU, real labour productivity growth, total factor productivity growth
    JEL: O15 F22 D24
    Date: 2018–12
  3. By: Christian Ghiglino (Department of Economics, University of Essex); Kazuo Nishimura (RIEB, Kobe University); Alain Venditti (Aix-Marseille Univ., CNRS, EHESS, Centrale Marseille, AMSE & EDHEC Business School)
    Abstract: We propose a model of non-balanced endogenous growth in which the final good, which can be either consumed or used as capital, is produced using two intermediate inputs, one being “knowledge-intensive†. Agents working in the knowledge-intensive sector need to accumulate technological knowledge and thus have to decide how to split their individual unit of time between accumulation of technological knowledge (research) and work. Agents working in the second sector do not need to accumulate knowledge and thus devote all their individual unit of time to work. Individual knowledge therefore becomes a labor-augmenting factor, and knowledge accumulation leads to an unbounded increase in TFP in the knowledge-intensive sector, and thus to endogenous capital deepening. The asymmetry in the growth rates of TFP leads to non-balanced growth. Labor (number of workers) reallocations across sectors occur, leading to a greater increase in output for the knowledge-intensive sector. We show that non-balanced growth is consistent with Kaldor facts, as the asymptotic equilibrium is above all characterized by a constant interest rate and capital share in national income. However, the economy follows a growth path converging to a particular level of wealth that depends on the initial price of capital and knowledge. As a consequence, countries with the same fundamentals but lower initial wealth will be characterized by lower asymptotic wealth. We therefore extend the Lucas [19] finding and prove the existence of non-convergence across countries in a framework with structural change.
    Keywords: two-sector model, technological knowledge, non-balanced endogenous growth, structural change, Kaldor and Kuznets facts
    JEL: C62 E32 O41
    Date: 2018–10
  4. By: Ly-Dai, Hung
    Abstract: We explain U-shape pattern of international capital inflows by one multi-country OLG economy and one cross-section data sample. The theory proves that capital inflows are decreasing on distance to frontier, which is measured by ratio of domestic productivity level over United States’ level. The evidences not only confirm the theory but also reveal that growth is decreasing on distance to frontier for club of convergence but increasing for club of unconvergence. Therefore, Neo-Classical growth model’s implication, that capital inflows are positively correlated to growth, applies for club of convergence. However, Allocation puzzle, that capital inflows are negatively correlated to growth, works for club of unconvergence. The turning point of U-shape pattern is the productivity growth rate at world technology frontier.
    Keywords: International Capital Flows, Productivity Growth, Relative Convergence
    JEL: F15 F36 F43
    Date: 2018–07
  5. By: Njangang, Henri
    Abstract: The purpose of this paper is to investigate the relationship between remittances and economic growth. Additionally, it examines whether the size of the informal economy alter negatively the effect of remittances on economic growth, which surprisingly has received less attention in the literature. The paper applied the Ordinary Least Squared (OLS) and system Generalized Method of Moment (GMM) by Arellano and Bond (1991) and Arellano and Bover (1995). The sample include 30 Sub-Saharan African (SSA) countries over 1991-2015. The results show that: first, remittances have a positive and significant effect on economic growth. Second, the impact of remittances on economic growth decreases with the size of the informal economy.
    Keywords: Remittances, the informal economy, economic growth, SSA
    JEL: E26 F22 F43 O55
    Date: 2018–11–22
  6. By: Simplice A. Asongu (University of Cape Town, Cape Town, South Africa); Vanessa S. Tchamyou (University of Antwerp, Belgium)
    Abstract: This article compares African countries to South Korea in terms of knowledge economy (KE). Emphasis is laid on human capital, knowledge creation, knowledge diffusion, institutions and economic incentives. The analytical approach consists of providing knowledge economy catch-up strategies that can be understood within the context of country-specific gaps between the frontier country in KE and laggard African countries. The empirical evidence is based on sigma convergence with data for the period 1996-2010. Overall, a KE diagnosis is provided by assessing KE gaps (between South Korea and specific-African countries) and suggesting compelling catch-up strategies with which to reduce identified gaps. Contemporary and non-contemporary policies from South Korea and more contemporary policies based on challenges of globalisation are discussed. The policy relevance of this inquiry aligns with the scholarly perspective that catch-up between South Korea and more advanced economies was accelerated by the former adapting to and assimilating relatively obsolete technological know-how from more developed nations.
    Keywords: Knowledge economy; Benchmarks; Policy syndromes; Catch-up; Africa
    JEL: O10 O30 O38 O55 O57
    Date: 2018–01
  7. By: Kant, Chander
    Abstract: We examine the relationship between privatization and growth of transition countries in Europe by using relative income and grouping them by ex-ante factors and by ex-post associations. For transition countries with comparable pre-1991 data also - Bulgaria, Hungary, Poland, and Romania or BHPR countries - privatization/regime change to market economy increased their annual catching-up-to-Germany from 0.90% to 1.50% but the increase was not due to higher TFP. It entirely occurred after they joined the EU, and is entirely due to higher contribution of human capital. Privatization did not impose short run costs on all countries while making CIS countries fell-behind very sharply. The greatly divergent post-transition growth both in the short and the long term cannot be explained by differing emphasis on external versus domestic liberalization. Catching-up of “new” ex-socialist SBCS countries (Slovenia, Baltic countries, the Czech republic and Slovakia) occurred only after they joined the EU. Human capital and TFP explain their growth while for Croatia and Serbia it is physical capital and TFP. Negative contribution of human capital is the sole reason underlying falling-behind of the CIS countries. Based on 1991-2013 catching-up/falling-behind, CIS countries have no prospect of ever equaling German income, pre-2004 EU Western-Europe will reach income equality with Germany in 70 years, BHPR countries in 72; SBCS countries in 104, and Croatia and Serbia in 193 years.
    Keywords: Command economy and market economy; “old” ex-socialist countries and “new” ex-socialist countries; accession to EU; factors behind differing post-socialist growth/catching-up; years for full convergence
    JEL: O10 O47
    Date: 2018–11–29
  8. By: Simplice A. Asongu (Yaoundé/Cameroon); Nicholas M. Odhiambo (University of South Africa, Pretoria, South Africa)
    Abstract: We analyze the evolution of fast emerging economies of the BRICS (Brazil, Russia, India, China & South Africa) and MINT (Mexico, Indonesia, Nigeria & Turkey) countries, by assessing growth determinants throughout the conditional distributions of the growth rate and real GDP output for the period 2001-2011. An instrumenal variable (IV) quantile regression approach is complemented with Two-Stage-Least Squares and IV Least Absolute Deviations. We find that the highest rates of growth of real GDP per head, among the nine countries of this study, corresponded to China, India, Nigeria, Indonesia and Turkey, but the highest increases in real GDP per capita corresponded, in descending order, to Turkey China, Brazil, South Africa and India. This study analyzes the impacts of several indicators on the increase of the rate of growth of real GDP and on the logarithm of the real GDP. We analyze several limitations of the methodology, related with the selection of the explained and the explanatory variables, the effect of missing variables, and the particular problems of some indicators. Our results show that Net Foreign Direct Investment, Natural Resources, and Political Stability have a positive and significant impact on the rate of growth of real GDP or on real GDP.
    Keywords: Economic Growth; Emerging countries; Quantile regression
    JEL: C52 F21 F23 O40 O50
    Date: 2018–01
  9. By: Batabyal, Amitrajeet; Higano, Yoshiro; Nijkamp, Peter
    Abstract: We have two objectives in this book. First, we bring together in one place, original research that sheds light on the myriad connections between disease, human health, and regional economic growth and development. Second, given the contemporary salience of Asia in world affairs, we concentrate on the trinity of disease, human health, and regional economic growth and development in different regions within Asia. Following this introductory chapter, there are nine chapters and each of these chapters—written by an expert or by a team of experts—discusses a particular research question or questions about disease, human health, and regional economic growth and development within Asia.
    Keywords: Asia, Disease, Economic Development, Human Health, Regional Growth
    JEL: I12 I15 R11
    Date: 2018–10–26

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