INTERNATIONAL PRODUCTIVITY DIFFERENCES IN MANUFACTURING INDUSTRY PROBLEMS WITH EXISTING THEORY AND SOME SUGGESTIONS FOR A THEORETICAL RESTRUCTURING
RAND CORP SANTA MONICA CA SANTA MONICA United States
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Part I of this study examines certain important difficulties with existing formal theory purporting to explain international differences in output per worker in manufacturing, particularly differences between developed and underdeveloped countries. Part II presents a theoretical case for abandoning two central assumptions of that theory -- that all firms can be considered as on the same neoclassical production function, and that factor markets are perfect and competitive. Basically the argument will be that manufacturing development should be modeled as an inter- and intra-national diffusion process. Part III presents an empirical analysis of Colombian-United States productivity differences which supports the argument of Part II.