tailieunhanh - ALPRODUCTION TECHNOLOGY AND TECHNOLOGIC PROGRESS

This paper examines the main drivers of this environmental innovation and specifically addresses the part of environmental policy in this process. Based on a comparative analysis of the development of the pulp and paper sector in different countries, the paper also examines whether different policy approaches have mattered for the speed and depth of environmental innovation. Additional information on the relationship between innovation and environmental regulation has been obtained by interviews with industry experts in different countries (see Appendix II). . | PRODUCTION TECHNOLOGY AND TECHNOLOGICAL PROGRESS Simon Baptist Markus Eberhardt6 c Francis TEALc d a Vivid Economics 306 Macmillan House Paddington Station London W2 1FT UK b St Catherine s College Oxford OX1 3UJ c Centre for the Study of African Economies Department of Economics University of Oxford Manor Road Oxford OX1 3UQ UK d Institute for the Study of Labour IZA Schaumburg-Lippe-Str. 5-9 53113 Bonn Germany First draft 17th March 2011 Preliminary and Incomplete Abstract In this paper we investigate production technology in the manufacturing sector using firmlevel panel data from Africa and macro panel data covering a large number of developing and developed economies. Our work makes three major contributions to the literature attempting to explain cross-country income differences. Firstly we redefine the technology frontier to include input coefficients along with the standard Total Factor Productivity. Our empirics reveals significant and important parameter heterogeneity across countries. Secondly we include intermediate inputs and use gross output as our measure of production as well as estimating rather than assuming and backing out the frontier. Finally we consider the hitherto unexplored link between micro and macro data. Despite the firm being the ultimate unit of production and hence the determinant of income the extensive firm datasets now available have been neither used to understand cross-country income differences nor as a direct complement to the macro data. Keywords production technology manufacturing cross-country heterogeneity JEL classification O14 O30 O47 Correspondence Centre for the Study of African Economies CSAE Department of Economics Manor Road Building Oxford OX1 3UQ UK Email PRODUCTION TECHNOLOGY AND TECHNOLOGICAL PROGRESS 1 1. INTRODUCTION Accounting for the huge income differences observed between countries has rightly been an enduring topic of research for the economics profession. At the macro