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Bridging the barriers: knowledge connections,productivity and capital accumulation
Authors:R Quentin Grafton  Tom Kompas  P Dorian Owen
Institution:(1) Crawford School of Economics and Government, The Australian National University, Canberra, ACT 0200, Australia;(2) Department of Economics, University of Otago, Dunedin, New Zealand
Abstract:The paper contributes to the explanation of the large differences in cross-country productivity performance by modelling and testing the effects of social barriers to communication on productivity and capital accumulation. In an optimal growth model, social barriers to communication, which impede the formation of knowledge connections, are shown to reduce both transitory and steady-state levels of total factor productivity (TFP), per capita consumption and reproducible capital. Empirical testing yields a robust and theoretically consistent result: linguistic barriers to communication reduce productivity and capital accumulation. The findings provide an explanation for cross-country differences in TFP, and fresh insights into how productivity ‘catch up’ may be initiated.
Contact Information P. Dorian OwenEmail:
Keywords:Knowledge connections  Productivity  Economic growth
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