The 'appropriate technology' explanation of productivity growth differentials: An empirical approach

This paper aims at giving empirical content to the Basu and Weil (1998) [Basu, S., Weil, D.N., 1998. Appropriate technology and growth. Quarterly Journal of Economics 113, 1025-1054] theory of growth, in which localized innovation, assimilation of spillovers and differences in speeds of capital intensification yield diverse patterns of international convergence and divergence. The contributions of these sources to labor productivity growth are quantified for a sample of countries, using data envelopment analysis techniques. Regression analysis shows that the observed patterns were mainly driven by processes of creating spillover potential through capital intensification. Assimilation appears to be much slower than assumed in Basu and Weil's model. (c) 2005 Elsevier B.V. All rights reserved.