nep-gro New Economics Papers
on Economic Growth
Issue of 2020‒03‒16
ten papers chosen by
Marc Klemp
University of Copenhagen

  1. Migrant Inventors and the Technological Advantage of Nations By Bahar, Dany; Choudhury, Prithwiraj; Rapoport, Hillel
  2. The Cultural Origin of Saving Behavior By Costa-Font, Joan; Giuliano, Paola; Ozcan, Berkay
  3. Conversionary Protestants do not cause democracy By Nikolova, Elena; Polansky, Jakub
  4. Industrial Growth in Sub-Saharan Africa: Evidence from Machine Learning with Insights from Nightlight Satellite Images By Christian S. Otchia; Simplice A. Asongu
  5. A simple Ricardo-Malthusian model of population, deforestation and biodiversity loss By Late Lawson; Lawson Late
  6. Factions, Local Accountability, and Long-Term Development : County-Level Evidence from a Chinese Province By Fang,Hanming; Hou,Linke; Liu,Mingxing; Xu,L. Colin; Zhang,Pengfei
  7. Human Capital and Economic Growth in Japan: 1885–2015 By Fukao, Kyoji; Makino, Tatsuji; Settsu, Tokihiko
  8. Financial Development, Economic Performance and Democracy By Zhenxiong Li; Hilary Ingham
  9. Retirement, Intergenerational Time Transfers, and Fertility By Eibich, Peter; Siedler, Thomas
  10. Nuclear Energy, Economic Growth and the Environment: Optimal policies in a model with endogenous technical change and environmental constraints By Thanasis Stengos; Nikos Fatouros

  1. By: Bahar, Dany (Brookings Institution); Choudhury, Prithwiraj (Harvard Business School); Rapoport, Hillel (Paris School of Economics)
    Abstract: We investigate the relationship between the presence of migrant inventors and the dynamics of innovation in the migrants' receiving countries. We find that countries are 25 to 60 percent more likely to gain advantage in patenting in certain technologies given a twofold increase in the number of foreign inventors from other nations that specialize in those same technologies. For the average country in our sample, this number corresponds to only 25 inventors and a standard deviation of 135. We deal with endogeneity concerns by using historical migration networks to instrument for stocks of migrant inventors. Our results generalize the evidence of previous studies that show how migrant inventors "import" knowledge from their home countries, which translates into higher patenting in the receiving countries. We interpret these results as tangible evidence of migrants facilitating the technology-specific diffusion of knowledge across nations.
    Keywords: innovation, migration, patent, technology, knowledge
    JEL: O31 O33 F22
    Date: 2020–02
  2. By: Costa-Font, Joan (London School of Economics); Giuliano, Paola (University of California, Los Angeles); Ozcan, Berkay (London School of Economics)
    Abstract: Traditional economic interpretations have not been successful in explaining differences in saving rates across countries. One hypothesis is that savings respond to cultural specific social norms. A seminal paper in economics (1) however did not find any effect of culture on savings. We revisit this evidence using a novel dataset, which allows us to study the saving behavior of up to three generations of immigrants in the United Kingdom. Against the backdrop of existing evidence, we find that cultural preferences are an important explanation for cross-country differences in saving behavior, and their relevance persists up to three generations.
    Keywords: saving, culture
    JEL: Z1 D0
    Date: 2020–02
  3. By: Nikolova, Elena; Polansky, Jakub
    Abstract: In "The Missionary Roots of Liberal Democracy", Robert D. Woodberry (2012) claims that the emergence of stable democracies around the world was influenced by conversionary Protestantism. While Woodberry's historical analysis is exhaustive, the accompanying empirical evidence suffers from severe inconsistencies. We replicate Woodberry's analysis using 26 alternative democracy measures and extend the time period over which the democracy measures are averaged. These two simple modifications lead to the breakdown of Woodberry's results. We find no significant relationship between Protestant missions and the development of democracy, which raises concerns about the robustness and broader applicability of Woodberry's findings. We discuss some alternative explanations for Woodberry's results which we hope can inform future research on this topic.
    Keywords: religion,democracy,economic history,political institutions
    JEL: H11 N40 Z12
    Date: 2020
  4. By: Christian S. Otchia (Hyogo, Japan); Simplice A. Asongu (Yaoundé, Cameroon)
    Abstract: This study uses nightlight time data and machine learning techniques to predict industrial development in Africa. The results provide the first evidence on how machine learning techniques and nightlight data can be used to predict economic development in places where subnational data are missing or not precise. Taken together, the research confirms four groups of important determinants of industrial growth: natural resources, agriculture growth, institutions, and manufacturing imports. Our findings indicate that Africa should follow a more multisector approach for development, putting natural resources and agriculture productivity growth at the forefront.
    Keywords: Industrial growth; Machine learning; Africa
    JEL: I32 O15 O40 O55
    Date: 2019–01
  5. By: Late Lawson (BETA, CNRS, INRAE & University of Strasbourg); Lawson Late
    Abstract: This paper assesses the interactions between human societies and nature, arguing that population growth and forest resources harvest cause natural habitat conversion, which resolves into biodiversity loss. Relying on profit and utility maximization behaviours, we describe the joint evolution of population, forest and species stock by a dynamic system characterized by a locally stable steady state. Compared to existing studies, we enlighten the possibility of total extinction of biological species (empty forests). Furthermore, our analysis supports an impossible peaceful cohabitation, as in presence of human population growth, forest resources and species stock diverge from their carrying capacity. Finally, scenarios analyses associated with high fertility and preference for the resource-based good globally indicate rapid population growth followed by a sudden drop.
    Keywords: Economic growth, Population, Forest clearing, Habitat destruction, Species loss
    JEL: Q32 Q57 R11
  6. By: Fang,Hanming; Hou,Linke; Liu,Mingxing; Xu,L. Colin; Zhang,Pengfei
    Abstract: This paper investigates, both theoretically and empirically, the role of factional competition and local accountability in explaining the enormous but puzzling county-level variations in development performance in Fujian province of China. When the Communist armies took over Fujian from the Nationalist control circa 1949, Communist cadres from two different army factions were assigned as county leaders. For decades the Fujian Provincial Standing Committee of the Communist Party had been dominated by members from one particular faction, which we refer as the strong faction. Counties also differed in whether there was local guerrilla presence prior to the Communist takeover. The model predicts that county leaders from the strong faction were less likely to pursue policies friendly to local development, because their political survival relied more on their loyalty to the provincial leader than on the grassroots support from local residents. In contrast, the political survival of county leaders from the weak faction was based more on local grassroots support, which could be best secured if these leaders focused on local development. In addition, the local guerrilla presence in the county further improved the development performance either because it intensified local accountability of the county leader, or because it better facilitated the provision of local public goods beneficial to development. The paper finds consistent and robust evidence supporting these assumptions; being affiliated with weak factions and having local accountability are both associated with sizable long-term benefits in terms of growth, education, private-sector development, and survival in the Great Famine. The paper also finds that being affiliated with the strong faction and adopting pro-local policies are associated with higher likelihood of political survival. The empirical findings here suggest that factional competition contributes to efficiency in non-democratic countries, and that local accountability is a key ingredient for balanced development.
    Keywords: Private Sector Economics,Private Sector Development Law,Marketing,Armed Conflict,Conflict and Fragile States,Industrial Economics,Economic Theory&Research,Economic Growth,Food Security
    Date: 2019–05–01
  7. By: Fukao, Kyoji; Makino, Tatsuji; Settsu, Tokihiko
    Abstract: This study presents growth account for Japan for the 130 years from 1885 to 2015 based on the measurement of labor quality simultaneously taking the effects of education and the allocation of labor across industries into account. The estimation results indicate that, over the 130 years, Japan’s labor productivity rose 46-fold, with increases in the capital-labor ratio accounting for 40 percent of this rise, improvements in labor quality for 35 percent, and TFP growth for 36 percent. Looking at the periods before and after World War II separately, we found that labor productivity growth accelerated substantially in the postwar period and was twice as high as in the prewar period. This difference in labor productivity growth can be explained by differences in the sources of growth: while growth during the prewar period was driven mainly by improvements in labor quality (with a growth contribution of 37 percent), during the postwar period increases in the capital-labor ratio and TFP growth made the largest contribution (38 percent and 35 percent, respectively).
    Date: 2020–02
  8. By: Zhenxiong Li; Hilary Ingham
    Abstract: This paper investigates the long-term effect of financial development on economic growth using annual data for 67 countries over the period 1971 to 2007. Both autoregressive distributed lag (ARDL) and cross-sectionally augmented autoregressive distributed lag (CS-ARDL) models are applied to count for crosscountry heterogeneity and error cross-country dependence. The results uphold a positive and significant effect of financial development on long-run per capita output. There is also some evidence of a non-linear relationship between financial development and growth. However, the analysis also reveals that the results derive primarily from non-democratic countries.
    Keywords: Economic growth, Financial development, Democracy
    JEL: O16 O43 P16
    Date: 2020
  9. By: Eibich, Peter (DIW Berlin); Siedler, Thomas (University of Hamburg)
    Abstract: Retired parents might invest time into their adult children by providing childcare. Such intergenerational time transfers can have important implications for family decisions. This paper estimates the effects of parental retirement on adult children's fertility. We use representative panel data from Germany to link observations on parents and adult children. We exploit eligibility ages for early retirement for identification in a regression discontinuity design. The results show that parent's early retirement significantly increases the probability of childbirth for adult children. However, parental retirement affects only the timing of adult children's fertility, without having an effect on total fertility.
    Keywords: retirement, fertility, intergenerational transfer, time use
    JEL: J13 J14 J22 J26
    Date: 2020–02
  10. By: Thanasis Stengos (Department of Economics and Finance, University of Guelph, Guelph ON Canada); Nikos Fatouros (Department of Economics and Finance, University of Guelph, Guelph ON Canada)
    Abstract: We use a model of endogenous growth with vertical innovations in order to derive optimal energy policy under uncertainty. Innovation can be directed to dirty, green or nuclear technologies, which in turn can be used to produce different types of energy. We show that, nuclear energy usage is not only a necessary welfare maximizing condition but also a crucial determinant of economic growth in the long-run. In addition, we find no evidence supporting the Environmental Kuznets Curve hypothesis under optimal policy implementation. Lastly, empirical results based on a panel VAR specification suggest that increases in emissions are strongly persistent in the long-run. Thus, a worsening of environmental quality seems to create dynamics that lead to even higher levels of emissions in the future.
    Keywords: Growth, Nuclear Energy, Innovation
    JEL: O31 O44 Q42 Q55
    Date: 2020

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