Natural Resources and Total Factor Productivity Growth in Developing Countries : Testing A New Methodology
Estimates of total factor productivity growth, a measure of increases in the efficiency of production, have traditionally been based on a two-factor model of labor and fixed capital. Because profits are measured residually in the System of National...
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| Online Access: | http://documents.worldbank.org/curated/en/565561547645473522/Natural-Resources-and-Total-Factor-Productivity-Growth-in-Developing-Countries-Testing-A-New-Methodology http://hdl.handle.net/10986/31172 |
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okr-10986-311722022-09-20T00:14:44Z Natural Resources and Total Factor Productivity Growth in Developing Countries : Testing A New Methodology Hamilton, Kirk Naikal, Esther Lange, Glenn-Marie TOTAL FACTOR PRODUCTIVITY ECONOMIC EFFICIENCY NATURAL RESOURCES GROWTH ACCOUNTING Estimates of total factor productivity growth, a measure of increases in the efficiency of production, have traditionally been based on a two-factor model of labor and fixed capital. Because profits are measured residually in the System of National Accounts, they implicitly include rents on natural resource exploitation, with the result that the contribution of fixed capital to growth in the inputs to gross domestic product is misstated, particularly in resource dependent developing countries. This leads to incorrect measures of total factor productivity growth. Using data on natural resources from the World Bank's Wealth of Nations database and methods combining the Solow growth accounting model with recent work at the Organisation for Economic Co-operation and Development, this paper makes new estimates of total factor productivity growth for 74 developing countries over 1996-2014. In the aggregate, including natural resources as a factor of production increases estimated total factor productivity growth across all country income classes and regions of the world when compared with the traditional two-factor approach. In addition, the estimated total factor productivity growth including natural resources is less volatile over time in the great majority of countries compared with the traditional approach. The availability of World Bank data on natural resource quantities and rents for a wide range of countries suggests that natural resources should be included in total factor productivity growth estimation going forward. Further research could focus on the distinctive roles played by different natural resource endowments. 2019-01-31T20:15:57Z 2019-01-31T20:15:57Z 2019-01 Working Paper http://documents.worldbank.org/curated/en/565561547645473522/Natural-Resources-and-Total-Factor-Productivity-Growth-in-Developing-Countries-Testing-A-New-Methodology http://hdl.handle.net/10986/31172 English Policy Research Working Paper;No. 8704 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo World Bank World Bank, Washington, DC Publications & Research Publications & Research :: Policy Research Working Paper |
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Digital Repository |
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Foreign Institution |
| institution |
Digital Repositories |
| building |
World Bank Open Knowledge Repository |
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World Bank |
| language |
English |
| topic |
TOTAL FACTOR PRODUCTIVITY ECONOMIC EFFICIENCY NATURAL RESOURCES GROWTH ACCOUNTING |
| spellingShingle |
TOTAL FACTOR PRODUCTIVITY ECONOMIC EFFICIENCY NATURAL RESOURCES GROWTH ACCOUNTING Hamilton, Kirk Naikal, Esther Lange, Glenn-Marie Natural Resources and Total Factor Productivity Growth in Developing Countries : Testing A New Methodology |
| relation |
Policy Research Working Paper;No. 8704 |
| description |
Estimates of total factor productivity
growth, a measure of increases in the efficiency of
production, have traditionally been based on a two-factor
model of labor and fixed capital. Because profits are
measured residually in the System of National Accounts, they
implicitly include rents on natural resource exploitation,
with the result that the contribution of fixed capital to
growth in the inputs to gross domestic product is misstated,
particularly in resource dependent developing countries.
This leads to incorrect measures of total factor
productivity growth. Using data on natural resources from
the World Bank's Wealth of Nations database and methods
combining the Solow growth accounting model with recent work
at the Organisation for Economic Co-operation and
Development, this paper makes new estimates of total factor
productivity growth for 74 developing countries over
1996-2014. In the aggregate, including natural resources as
a factor of production increases estimated total factor
productivity growth across all country income classes and
regions of the world when compared with the traditional
two-factor approach. In addition, the estimated total factor
productivity growth including natural resources is less
volatile over time in the great majority of countries
compared with the traditional approach. The availability of
World Bank data on natural resource quantities and rents for
a wide range of countries suggests that natural resources
should be included in total factor productivity growth
estimation going forward. Further research could focus on
the distinctive roles played by different natural resource endowments. |
| format |
Working Paper |
| author |
Hamilton, Kirk Naikal, Esther Lange, Glenn-Marie |
| author_facet |
Hamilton, Kirk Naikal, Esther Lange, Glenn-Marie |
| author_sort |
Hamilton, Kirk |
| title |
Natural Resources and Total Factor Productivity Growth in Developing Countries : Testing A New Methodology |
| title_short |
Natural Resources and Total Factor Productivity Growth in Developing Countries : Testing A New Methodology |
| title_full |
Natural Resources and Total Factor Productivity Growth in Developing Countries : Testing A New Methodology |
| title_fullStr |
Natural Resources and Total Factor Productivity Growth in Developing Countries : Testing A New Methodology |
| title_full_unstemmed |
Natural Resources and Total Factor Productivity Growth in Developing Countries : Testing A New Methodology |
| title_sort |
natural resources and total factor productivity growth in developing countries : testing a new methodology |
| publisher |
World Bank, Washington, DC |
| publishDate |
2019 |
| url |
http://documents.worldbank.org/curated/en/565561547645473522/Natural-Resources-and-Total-Factor-Productivity-Growth-in-Developing-Countries-Testing-A-New-Methodology http://hdl.handle.net/10986/31172 |
| _version_ |
1764473708172279808 |