OECD Development Centre Working Papers
The OECD Development Centre links OECD members with developing and emerging economies and fosters debate and discussion to seek creative policy solutions to emerging global issues and development challenges. This series of working papers is intended to disseminate the OECD Development Centre’s research findings rapidly among specialists in the field concerned. These papers are generally available in the original English or French, with a summary in the other language.
- ISSN : 18151949 (en ligne)
- https://doi.org/10.1787/18151949
Innovation, Productivity and Economic Development in Latin America and the Caribbean
GDP per capita in Latin America has been falling behind high-income countries and other
benchmarks for decades and the region’s mediocre growth performance is one of the main
reasons why poverty reduction, and living standards more generally, in the region is well below
that observed in peer countries. In this paper, we explore some of the potential roots of this poor
performance by using development accounting techniques. The results point towards total factor
productivity as the main culprit for the region’s lack of convergence. In order to investigate what
causes the lack of productivity catch-up, we analyse the determinants of technology diffusion, in
particular of internet and mobile phone technologies. The empirical results show that
institutions, absorption capacity (human capital), and financial constraints are the main
explanatory variables of the diffusion gaps in these technologies between the OECD and Latin
America. We also explore the performance of the region in terms of health outcomes, reflected in
the evolution of life expectancy, and the specific role played by technological innovation and
adoption. Finally, a calibration exercise of an endogenous growth model allows us to assess the
extent to which the region’s per capita income gap is due to problems in factor accumulation or
distortions that reduce the incentives to innovate; the results point to very different situations
across countries in the region. While for some countries we find evidence of ‚innovation
shortfalls?, other countries’ problems concentrate around low factor accumulation.
Mots-clés: economic growth, Latin America, total factor productivity, innovation
JEL:
O10: Economic Development, Innovation, Technological Change, and Growth / Economic Development / Economic Development: General;
O30: Economic Development, Innovation, Technological Change, and Growth / Innovation; Research and Development; Technological Change; Intellectual Property Rights / Innovation; Research and Development; Technological Change; Intellectual Property Rights: General;
O47: Economic Development, Innovation, Technological Change, and Growth / Economic Growth and Aggregate Productivity / Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
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