Productivity Spillovers in the Global Market

Nazmus Sadat Khan, Jun Nagayasu

Research output: Chapter in Book/Report/Conference proceedingChapter


This paper analyzes the effect of productivity shocks originating from other countries on economic growth in the home country. Traditionally, productivity shocks have been considered as driving forces of economic growth in their home countries. However, productivity improvements occur both at home and overseas. In liberalized global markets, economic growth is, in theory, also attributable to productivity shocks from other countries. Using data from 18 countries, we show that numerous countries benefit from productivity spillovers. Nevertheless, their impacts on the economy differ according to the origin of the economic shocks. On the one hand, US shocks are rather pervasive and affect many economies and regions, regardless of their development stage. On the other hand, shocks from other country groups exert less influence over foreign economies. Thus, homogeneous effects of productivity spillovers across countries, which are often assumed in previous studies using the standard panel data and spatial models, are inappropriate. The mixed results from previous global analyses, particularly using macroeconomic data, are attributable to such heterogeneous effects of productivity shocks.

Original languageEnglish
Title of host publicationDynamic Modeling and Econometrics in Economics and Finance
PublisherSpringer Science and Business Media Deutschland GmbH
Number of pages25
Publication statusPublished - 2021

Publication series

NameDynamic Modeling and Econometrics in Economics and Finance
ISSN (Print)1566-0419
ISSN (Electronic)2363-8370


  • Economic growth
  • Global vector autoregression
  • International transmission
  • Productivity

ASJC Scopus subject areas

  • Economics, Econometrics and Finance(all)


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