Journal Article

An Empirical Investigation on the Gravitation and Convergence of Industry return Rates in OECD Countries

Author

  • Andrea Vaona
Publication Date

Tests are offered for the hypotheses that sectoral average profit rates and incremental return rates are gravitating around or converging towards a common value. We study data for various OECD countries relying on an econometric method able to account for residual autocorrelation and cross-sector correlation. Our null hypotheses receive only a mixed empirical support. This is interpreted as the result of various kinds of limitations to capital mobility. Policy implications are discussed.

Info

JEL Classification
L16, L60, L19, L70, L80, L90, B51, B52
DOI
10.1080/02692171.2010.529429

Key Words

  • capital mobility
  • convergence
  • exactly median unbiased estimator
  • gravitation of profit rates
  • incremental return rates
  • industrial average profit rates
  • SURE estimation