Estimating factor shares from nonstationary panel data

Juan Carlos Aquino, N.R. Ramírez-Rondán

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The measurement of the sources of economic growth, essential for understanding the long-term perspective of any economy, depends on both the functional form that summarizes technology and factor share values. We estimate the share of physical capital in output, implied by a Cobb–Douglas production function, using fully modified and dynamic ordinary least squares estimators within a panel cointegration framework for 109 countries over the period 1960–2014. For several measures of labor, our estimates range between 0.46 and 0.56 for the worldwide set and vary significantly across regions. The panel estimates are: (i) similar when human capital is taken as a separate factor of production; and (ii) more robust than both the average of the individual cross-country estimates and those obtained in the model in differences. We also find that the CES production function estimates favor the Cobb–Douglas specification. Finally, we provide some evidence of a decline in the share of labor, in line with recent empirical studies. © 2019, Springer-Verlag GmbH Germany, part of Springer Nature.
Idioma originalInglés
Páginas (desde-hasta)2353-2380
Número de páginas28
PublicaciónEmpirical Economics
EstadoPublicada - 1 may. 2020
Publicado de forma externa

Nota bibliográfica

Funding Information:
This paper is based on chapter 2 of Juan Carlos Aquino’s Ph.D. Dissertation at Washington University in St. Louis. We would like to acknowledge Gaetano Antinolfi, Costas Azariadis, Michele Boldrin, Robert Parks, Witson Peña, Francisco Rodríguez, Gabriel Rodríguez, Badi Baltagi and the three anonymous referees for valuable comments and suggestions. We also thank to the participants of the IX Annual Meeting of the Latin American and Caribbean Economic Association, the XXII Annual Meeting of the Central Bank of Peru, the XX Annual Meeting of the Central Bank of Uruguay and the Research Seminar of the Central Bank of Peru for their discussions and useful comments. Special thanks to Patricia Paskov for proofreading the paper. As usual, all remaining errors are ours.

Publisher Copyright:
© 2019, Springer-Verlag GmbH Germany, part of Springer Nature.


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