Welfare effects of technological convergence in processed food industries.

employment Country-specific intercepts: Austria 8.910 *** (44.61) Colombia 9.622 *** (50.23) Cyprus 8.712 *** (48.85) Denmark 8.968 *** (46.26) Ecuador 7.281 *** (39.29) Eritrea 8.236 *** (50.77) Ethiopia 8.458 *** (48.49) Finland 8.930 *** (46.65) India 8.224 *** (41.73) Indonesia 7.973 *** (40.57) Iran 8.598 *** (44.57) Italy 9.107 *** (43.16) Japan 9.527 *** (46.16) Jordan 8.487 *** (49.00) Korea 9.515 *** (47.03) Malawi 7.031 *** (36.39) Malaysia 8.727 *** (44.95) Malta 8.798 *** (50.67) Mexico 9.149 *** (45.69) Mongolia 6.690 *** (35.19) Norway 8.959 *** (46.48) Oman 8.232 *** (41.58) Panama 8.335 *** (45.44) Portugal 8.493 *** (43.60) Singapore 8.688 *** (47.06) Spain 9.218 *** (46.12) Thailand 8.459 *** (40.88) Turkey 9.259 *** (48.35) United Kingdom 9.271 *** (45.09) United States 10.045 *** (48.06) [R.sup.2] 0.998 N = 3028 F test: [H.sub.0c] = [for all]c

[b.sub.0] Industry-specific intercepts: Austria 1511 -0.478 *** (-9.42) Colombia 1512 -0.540 *** (-9.99) Cyprus 1513 -0.608 *** (-11.71) Denmark 1514 -0.110 ** (-2.16) Ecuador 1520 -0.220 *** (-4.40) Eritrea 1531 -0.204 *** (-3.99) Ethiopia 1532 -0.104 (-1.49) Finland 1533 -0.160 *** (-3.10) India 1541 -0.515 *** (-9.18) Indonesia 1542 -0.139 ** (-2.42) Iran 1543 -0.294 *** (-5.27) Italy 1544 -0.437 *** (-7.35) Japan 1549 -0.294 ** (-5.29) Jordan 1551 0.330 *** (5.66) Korea 1552 -0.193 *** (-2.95) Malawi 1553 0.532 *** (9.68) Malaysia 1554 -- Malta Mexico Mongolia Norway Oman Panama Portugal Singapore Spain Thailand Turkey United Kingdom United States [R.sup.2] N = 3028 F test: [H.sub.0c] = F(29,2972) = 148.55 ***

[b.sub.0] Time-specific intercepts: Austria 1993 -0.076 (-1.53) Colombia 1994 -0.072 (-1.49) Cyprus 1995 -0.072 (-1.49) Denmark 1996 -0.052 (-1.08) Ecuador 1997 -0.022 (-0.46) Eritrea 1998 -0.046 (-0.97) Ethiopia 1999 -0.013 (-0.27) Finland 2000 -0.036 (-0.77) India 2001 -- Indonesia Iran Italy Japan Jordan Korea Malawi Malaysia Malta Mexico Mongolia Norway Oman Panama Portugal Singapore Spain Thailand Turkey United Kingdom United States [R.sup.2] N = 3028 F test: [H.sub.0c] = Reject [H.sub.0]

[b.sub.0] Note: Triple asterisk (***) indicates significance at 1%; double asterisk (**) indicates significance at 5%; numbers in parentheses are t-statistic of the coefficients. Dummy variables of ISIC 1554 and year 2001 are dropped to avoid perfect multicollinearity. Table 2. Productivity Leaders in 17 Processed Food Industries

Average TFP Growth

Rate over

1993-2001 (%)

Productivity The Industry and ISIC Code Leader Leader Followers 1511 Processing/preserving United States 4.80 2.19

of meat 1512 Processing/preserving United States 3.36 0.48

of fish 1513 Processing/preserving of United States 4.23 1.51

fruits and vegetables 1514 Vegetable and animal United States 2.64 -0.23

oils and fats 1520 Dairy products United States 2.40 2.23 1531 Grain mill products United States 1.15 -0.45 1532 Starches and starch Spain 4.39 1.35

products 1533 Prepared animal feeds United States 2.34 0.83 1541 Bakery products Japan 1.96 1.07 1542 Sugar Korea 6.70 0.02 1543 Cocoa, chocolate and Japan 2.73 1.07

sugar confectionery 1544 Macaroni, noodle and Korea 4.42 -2.16

similar products 1549 Other food products Mexico 2.29 2.21

n.e.c. 1551 Distilling, rectifying United States -0.04 0.47

and blending of spirits 1552 Wines United States 2.76 3.32 1553 Malt liquors and malt United States -0.10 -0.37 1554 Soft drinks; mineral United States 3.20 1.62

waters Table 3. Test of Productivity Convergence Dependent Variable: Average Growth Rate of Followers' Relative TFP (1993-2001) Independent Variable Estimates Rate of

Convergence Intercept -0.058 ***

(-8.46) Log of productivity level in 1993: 1511 Processing/preserving of meat -0.046 *** 0.058

(-4.54) 1512 Processing/preserving of fish -0.032 ** 0.038

(-2.19) 1513 Processing/preserving of -0.024 ** 0.026

fruits and vegetables (-2.26) 1514 Vegetable and animal oils -0.016 0.018

and fats (-1.58) 1520 Dairy products -0.049 *** 0.062

(-4.95) 1531 Grain mill products -0.023 *** 0.025

(-3.07) 1532 Starches and starch products -0.082 0.137

(-1.42) 1533 Prepared animal feeds -0.045 *** 0.057

(-4.24) 1541 Bakery products -0.055 *** 0.073

(-3.37) 1542 Sugar -0.001 0.001

(-0.09) 1543 Cocoa, chocolate, and sugar -0.066 * 0.095

confectionery (-1.76) 1544 Macaroni, noodle, and -0.026 0.029

similar products (-0.74) 1549 Other food products n.e.c. -0.046 *** 0.058

(-2.97) 1551 Distilling, rectifying, and -0.038 *** 0.046

blending of spirits (-3.78) 1552 Wines -0.044 *** 0.054

(-3.97) 1553 Malt liquors and malt -0.048 *** 0.061

(-3.81) 1554 Soft drinks; mineral waters -0.039 *** 0.047

(-3.84) [R.sup.2] 0.225 N = 302 Note: Triple asterisk(***) indicates significance at 1%; double asterisk(**) indicates significance at 5%; single asterisk(*) indicates significance at 10%. Numbers in parentheses are t-statistic of the coefficients. Table 4. Effects of Technological Convergence

FGLS

(Grouped by Independent Variable OLS Industry) a. Estimates of Followers' Global Value-Added Share Equation Dependent Variable: Average Growth Rate of Followers' Global Value-Added Share (1993-22001) Average growth rate of 0.909 *** 0.974 ***

relative TFP, 1993-2001 (43.03) (80.47) Average growth rate of 0.248 *** 0.236 ***

global capital share, (12.84) (25.83)

1993-2001 Average growth rate of 0.753 *** 0.759 ***

global labor share, (33.72) (59.53)

1993-2001 Country fixed effects Yes Yes

F test: [H.sub.0]: F (29, 270) = [chi square]

[b.sub.0c] = [b.sub.0] 0.43 (29) = 13.28

[for all]c [R.sup.2] 0.948 N = 303 LR Test. [H.sub.0]: [chi square](16) =

No groupwise 310.10 ***

heteroskedasticity b. Estimates of Followers' Relative Wage Equation Dependent Variable: Average Growth Rate of Followers' Relative Wage (1993-2001) Average growth rate of 0.216 *** 0.207 ***

relative TFP, 1993-2001 (5.86) (7.26) Average growth rate of 0.104 *** 0.103 ***

relative capital (3.30) (3.72)

intensity, 1993-2001 Country fixed effects Yes Yes

F test: [H.sub.0]: F (27, 246) = [chi square](27) =

[b.sub.0c] = [b.sub.0] 6.58 *** 263.58 ***

[for all]c [R.sup.2] 0.539 N = 276 LR Test. [H.sub.0]: [chi square](16) =

No groupwise 80.84 ***