University of Otago

Social Divergence and Economic Performance

Email address: DOwen@commerce.otago.ac.nz

Keywords: social divergence, total factor productivity

JEL Classifications: O4, C2, P0

Abstract:
This paper introduces the concept of social divergence defined as the social barriers to communication and exchange between individuals and groups of individuals within a society. Social divergence is determined by the characteristics of a society including the distribution of income, ethnolinguistic diversity, religious diversity, educational distance, and other factors. It is hypothesized that social divergence reduces the degree of interaction between individuals that stimulates innovation and leads to the diffusion of productivity-enhancing ideas. Using cross-section data from a sample of developing countries, we examine empirically the effects of measures of social divergence on total factor productivity. The results indicate that, separate from any effects due to factor accumulation, higher levels of social divergence result in lower levels of economic performance.

PDF file of paper: owen.pdf

Session: Empirical Issues in Industrial Organization and Development

Time: Sunday, 8 July, 2:15pm - 3:45pm

Room: F