Does Productivity Converge Across Countries and Across Sectors? Empirical Evidences from Eight OECD Countries

Abstract

The increasing economic international integration that we have witnessed over the past fifteen years, lead many economists to study, from both the theoretical and empirical point of view, the existence and the determinants of convergence among the economies of different countries. In fact, at the basis of the hypothesis of convergence lies the role of international trade as a vehicle for the diffusion of technological progress among countries. Trade in goods and services should favour the transmission of technical innovation from one country to another, helping to explain an increasingly homogeneous set of knowledge. If countries are endowed with identical or very similar production technologies, then in the long run international trade should also guarantee that convergence in the productivity is reached.