Effect of productivity increase on economic growth

The existence of convergence examined on the basis of material productivity is scarcely any in the literature. This thesis is contributed to the literature by investigating whether there is convergence in terms of material productivity of countries. Convergence hypothesis assert that difference between leader countries and laggard countries will narrow over time. Laggard countries taking advantage of relative backwardness with obtain technical knowledge and techology from leader countries for use in production system. This is show that this countries will produce more output with input that little than output. Material productivity examines the productivity of all materials involved in the production process from nature and importation. Material productivity take in consideration by countries due to there is inreasing population and sustainability projections. The main aim of this study is analysed material productivity convergence. 100 countries is examined for whether there is convergence. This countries grouped to 4 income levels: low, lower-middle, upper-middle and high income. Also, this groups examined two forms: every groups converge to average of intragroup, every group average converge to average of high income level group. According to results, countries in lower-middle income levels is converged to both intragroup material productivity average and high income level material productivity average.