Hildegunn E. Stokke

Technology Adoption and Multiple Growth Paths: An Intertemporal General Equilibrium Analysis of the Catch-Up Process in Thailand

As opposed to the Veblen—Gerschenkron catching-up hypothesis, the recent literature allows for technological divergence in backward economies. We extend a nonlinear adoption function to include openness and interact with capital accumulation in an intertemporal general equilibrium framework. The threshold gap necessary to catch up is endogenously determined by the economys absorptive capacity. The model generates multiple transition growth paths depending on whether technological catch-up is achieved, and due to the endogeneity of the threshold gap, endogenous switching between development paths might be observed. Our simulations of the Thailand experience show how lack of investment in education and protectionism generate loss of transition growth and technological divergence. The paper highlights the role of absorptive capacity, and especially its importance for economies on the balance between low growth and high growth paths. JEL no. O41, O53

Productivity Growth and Organizational Learning

A new specification of the sources of productivity growth is offered. Motivated by the lack of innovation and technology adoption in backward economies, a third channel of growth related to organizational structure, work ethics, and discipline in the production process (for simplicity called organizational learning) is suggested. The suggested specification generates new insights about the dominating source of growth during the development process: organizational learning in backward economies, technology adoption in middle-income economies, and innovation in developed economies. This adds to the current understanding of development as a transition from technology adoption to innovation. Numerical simulations of the Thai catch-up process since 1965 illustrate the importance of organizational learning. A counterfactual experiment shows how investments in secondary education contribute to the move from organizational learning to adoption of more advanced foreign technology.

Regional Convergence of Income and Education: Investigation of Distribution Dynamics

Recent US studies find that regional education levels diverge and that this can explain the decline of income convergence. The paper challenges the suggested relationship between movements in the distributions of income and education based on Norwegian data. Kernel density functions and Markov chains are applied and a test is undertaken of co-movements in the distributions of education and income. Education levels converge and are equalised across the country, and this process coincides with income convergence. However, the test indicates that transitions in the income and education distributions are basically unrelated. The education level increases in large cities with limited income growth and the income growth is strong in regions with continued low education level.

Population Divergence and Income Convergence: Regional Distribution Dynamics for Norway

Rattsø J. and Stokke H. E. Population divergence and income convergence: regional distribution dynamics for Norway, Regional Studies. Regional population divergence follows from in-migration to cities with high income levels. The dynamic relationship between population and income is investigated for Norwegian labour market regions using distribution analysis. Income convergence is shown to result from upward transitions in the income distribution by low- and middle-income regions, and the linkages between income growth and population growth are weak. The population-weighted income distribution diverges, since the expanding city-regions stay at the income top. People are moving to regions with the highest income levels, but these regions do not have the highest income growth.