and Jones (1996) find that both cross-section and time series techniques provide evidence
for convergence in manufacturing and mining sectors, but there is no evidence of
convergence in construction and wholesale/retail sectors, while the results are mixed to
negative for transportation and other services. Bernard and Jones (1996) point to differences
in the data to reconcile the substantial difference of their results in comparison to those
obtained by Barro and Sala-i-Martin (1991).
The unequal distribution of productivity levels is likely to a considerable extent due
to disparities in technology levels. While some regions or countries are leading in technology,
others are far behind. For example, Dollar and Wolf (1993) studied a sample of 13
industrialized countries and found that the US has maintained the lead in labor productivity
for all manufacturing over the entire period 1963—1986. Also, the US has been recognized as
technology leader in various industries in many studies. Dollar and Wolf (1993) show that
other industrialized countries are converging to the US productivity level by way of catching
up. They revealed that in the mid-1970s, Japan and Germany had achieved roughly 90% of
the Total Factor Product (TFP) level of US manufacturing, and the difference among all
OECD countries was small.
Convergence to the productivity level of the technology leader is largely determined
by the technology available at the level of the follower. It is often argued that the stock of
human capital plays a crucial role in the process of catching up to the technology leader.
Nelson and Phelps (1966) postulated that the rate of adoption of a new technology depends
on the ability of individuals or firms to implement new ideas and the gap between the
theoretical level of technology, and the level of technology in practice. It can therefore be
expected that economies located closer to a technology leader from geographical and
technological standpoints may benefit more and grow faster. Benhabib and Spiegel (1994)