Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/203365 
Year of Publication: 
2017
Series/Report no.: 
ADB Economics Working Paper Series No. 527
Publisher: 
Asian Development Bank (ADB), Manila
Abstract: 
We examine the importance of total factor productivity (TFP) growth in middle-income countries based on cross-country panel data for the period 1975-2014. We find that TFP growth contributed significantly to a country's upward transition from middle-income to high-income country group. The TFP growth model reveals that the catch-up effect, human capital, smaller population, weak currency, and research and development (R&D) growth are significant sources of TFP growth. We do not find a systematic difference in the TFP growth models for middle-income countries. In analyzing the role of factors influencing TFP growth at different income stages, strengthening innovative activities and building innovative capacities are important in overcoming the challenges that middle-income countries face when transitioning to the high-income group. Governments of upper-middle-income countries need to initiate reform to motivate innovation by optimizing national R&D systems, and redesigning the educational system to target promoting innovation.
Subjects: 
economic growth
human capital
middle-income countries
research and development
totalfactor productivity
JEL: 
O47
O57
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by Logo
Document Type: 
Working Paper

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