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Hans De Keulenaer

Unconditional convergence in manufacturing

Unlike economies as a whole, manufacturing industries exhibit strong un-conditional convergence in labor productivity. The article documents this atvarious levels of disaggregation for a large sample covering more than 100countries over recent decades. The result is highly robust to changes in thesample and specification. The coefficient of unconditional convergence is esti-mated quite precisely and is large, at between 2–3% in most specifications and2.9% a year in the baseline specification covering 118 countries. The article alsofinds substantial sigma-convergence at the two-digit level for a smaller sampleof countries. Despite strong convergence within manufacturing, aggregate con-vergence fails due to the small share of manufacturing employment inlow-income countries and the slow pace of industrialization. Because of datacoverage, these findings should be as viewed as applying to the organized,formal parts of manufacturing.

  • Unlike economies as a whole, manufacturing industries exhibit strong unconditional convergence in labor productivity. The article documents this at various levels of disaggregation for a large sample covering more than 100 countries over recent decades.
  • Put differently, successful countries experience both productivity convergence in formal manufacturing and rapid industrialization. Unsuccessful countries make do with just the former.
Hans De Keulenaer
  • This means that for every advantage a new technology offers, there is always a corresponding disadvantage.
  • you would be surprised at how many people believe that new technologies are unmixed blessings

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