in contrast with labour costs, in most sectors energy costs form only a small part of total
production costs and, hence, firms do not have the incentive to search for best-practice
technologies at the international market, as opposed to labour-augmenting technologies.
In any case, since productivity growth is primarily driven by technological change,
our results suggest that patterns of international technology flows do exist, while at the same
time they seem to be limited and at least to some extent sector-specific. There is some reason
to believe that technology diffusion and knowledge spillovers are local rather than global (cf.
Keller, 2002). This suggests the need for specific attention to be paid to the spatial dimension
of technology diffusion in driving energy- and labour-productivity growth in different
countries.
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