Technological Diffusion and Productivity Convergence: A Study for Manufacturing in the Oecd (Organisation for Economic Co-Operation and Development‪)‬

1. Introduction A large empirical literature by now exists on the issue of per capita income or labor productivity convergence between countries. Most of this work makes use of regression analysis and bases itself on the transitional dynamics of the standard neoclassical model of economic growth with exogenous technical progress. As is well-known, this dynamics is characterized by conditional convergence, due to the property of decreasing returns to capital inputs in the production function. Equations are estimated that relate the rate of growth of per capita income or labor productivity to the log of their initial level and to the rates of accumulation of the considered types of capital, as well as to other variables that condition the steady state. When estimated on large cross-sections of countries over an entire period of time, the results would appear to confirm the predictions of the neoclassical model, provided that this includes human capital as a factor input. In the case of the OECD, the results would even seem to suggest the occurrence of unconditional convergence (for a survey, see Sala-i-Martin 1996).