Sources of Knowledge and Productivity

We estimate domestic productivity relationships for a sample of 16 OECD countries through probably the most general specification yet. We identify ten key determinants of productivity - all derived from different theoretical models. Our specification may address the potential problem of omitted variables. The issues of cross-country heterogeneity and endogeneity are addressed. The sources of knowledge appear robust in driving productivity; however, other determinants postulated by different theoretical models are also significant. The productivity relationships are heterogeneous across OECD countries implying that country-specific factors may play an important role in domestic productivity policy.