Sectoral capital-labor ratios and total factor productivity : Evidence from Asia

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Original languageEnglish
Pages (from-to)674-684
Journal / PublicationReview of International Economics
Volume19
Issue number4
Publication statusPublished - Sept 2011

Abstract

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. © 2011 Blackwell Publishing Ltd.