Productivity Growth, Technological Convergence, RandD, Trade, and Labor Markets: Evidence From the French Manufacturing Sector
IMF Working Papers, October 1, 2006
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- Productivity Growth, Technological Convergence, RandD, Trade, and Labor Markets: Evidence From the French Manufacturing Sector
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Bibliographic details
- Authors: Tehmina S. Khan
- Published: October 1, 2006
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781451864908.001
Summary
- Total factor productivity (TFP) of 14 manufacturing sectors in France has kept up with that of the United States during 1980-2002 and remained well above that of the United Kingdom.
- Estimates use a dynamic panel equilibrium correction model.
- Sectors further behind the technological frontier experience faster productivity growth.
- Spending on research and development and trade with technologically advanced economies positively influences TFP growth, but not the speed of convergence.
- TFP growth is negatively related to some key labor market variables, namely the replacement ratio and the ratio of the minimum wage to the median wage.
Key findings and empirical results
- Geographic and sectoral comparison:
- French TFP (14 manufacturing sectors) comparable to United States TFP over 1980-2002.
- French TFP remained well above United Kingdom TFP over 1980-2002.
- Convergence dynamics:
- Faster productivity growth observed in sectors further behind the technological frontier (conditional convergence).
- Trade with technologically advanced economies does not affect the speed of convergence, though it positively influences TFP growth.
- Role of research and development:
- Spending on research and development (R&D) positively influences TFP growth.
- Labor market effects:
- TFP growth is negatively related to the replacement ratio.
- TFP growth is negatively related to the ratio of the minimum wage to the median wage.
Methodology
- Estimation approach: dynamic panel equilibrium correction model.
- Data scope: 14 manufacturing sectors in France over 1980-2002.
Policy-relevant implications
- Encouraging R&D spending can foster TFP growth in manufacturing sectors.
- Deepening trade links with technologically advanced economies can raise TFP growth, though additional measures may be needed to accelerate convergence to the technological frontier.
- Labor market institutions may influence productivity: high replacement ratios and high minimum-wage-to-median-wage ratios are associated with lower TFP growth, suggesting reforms that alter these margins could affect productivity outcomes.
Publication and metadata
- Author: Tehmina S. Khan
- Date: October 1, 2006
- Series: Working Paper No. 2006/230
- Issue: 230
- Volume: 2006
- Pages: 38
- ISBN: 9781451864908
- ISSN: 1018-5941
- DOI: https://doi.org/10.5089/9781451864908.001
Source: IMF Working Paper — "Productivity Growth, Technological Convergence, RandD, Trade, and Labor Markets: Evidence From the French Manufacturing Sector" (Tehmina S. Khan, October 1, 2006).