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Sectoral Capital–Labor Ratios and Total Factor Productivity: Evidence from Asia
Author(s) -
Kakkar Vikas,
Yan Isabel K.M.
Publication year - 2011
Publication title -
review of international economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.513
H-Index - 58
eISSN - 1467-9396
pISSN - 0965-7576
DOI - 10.1111/j.1467-9396.2011.00974.x
Subject(s) - economics , cointegration , total factor productivity , productivity , context (archaeology) , capital (architecture) , panel data , capital good , econometrics , macroeconomics , labour economics , economy , goods and services , history , paleontology , archaeology , biology
This paper examines the relationship between sectoral capital–labor ratios and total factor productivity (TFP) for six Asian economies in the context of the Balassa–Samuelson model. A strong prediction of the model is that the capital–labor ratios in both the traded‐ and nontraded‐goods sectors depend on the TFP in the traded‐goods sector. Both single‐equation and panel cointegration tests support this implication of the model.