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Industrial structure and labour markets : a study on productivity growth

Kılıçaslan, Yılmaz
This thesis aims to provide evidence on the relations between productivity, industrial structure, and labour markets for countries with different characteristics from 1965 to 1999. In order to do so, we first examine manufacturing industry production and trade with respect to both technology orientation and intensity, the impact of structural change on productivity growth, and the existence of convergence in industrial structures. Second, this study investigates the impact of labour market and industrial structures on aggregate productivity in manufacturing. While descriptive analysis of manufacturing industry with regard to technological orientation and intensity shows changing industrial structures in favour of relatively more technology intensive production and exports especially in fast growing countries, decomposition analysis suggests that the impact of structural change on productivity growth is negligible for most of the countries. The factor analysis revealed that although a general structural convergence tendency among countries is not observed, fast growing countries have converged their industrial structure towards those of industrialised countries. Finally, econometric estimation results also showed that while wage flexibility is detrimental to productivity in manufacturing, regulations in labour markets may foster productivity growth.