Dynamic Panel Analysis of Influence of Quality of Human Capital on Total Factor Productivity in Old European Union Countries

Adam Balcerzak () and Michal Pietrzak

No 19/2016, Working Papers from Institute of Economic Research

Abstract: Improving productivity is the main determinant of long term develop-ment. In the EU in Europe 2020 strategy special attention was given to the role of quality of human capital (QHC) as an important determinant of productivity growth. In this context the aim of the article is to assess the impact of the QHC on total factor productivity (TFP) in “old” EU countries. The research is conducted at macroeconomic level. EU economies must build their competitiveness in reality of knowledge-based economy. Thus, the QHC was analysed from the point of view of global knowledge economy. This factor was treated as a multidimensional phenom-enon. As a result, it was measured with application of TOPSIS method, which al-lowed to obtained time series for dynamic panel analysis of determinants of TFP. In order to evaluate TFP parameters of the Cobb-Douglas production function for de-veloped EU countries were estimated. Then, the relationship between the QHC and the level of TFP was assessed with application of dynamic panel model. The re-search was based on Eurostat data for the years 2000-2010. It confirmed a signifi-cant influence of the QHC on the level of TFP in the analysed economies.

Keywords: panel model; TOPSIS; TFP; quality of human capital; EU countries (search for similar items in EconPapers)
JEL-codes: C23 C38 O47 (search for similar items in EconPapers)
Date: 2016-05, Revised 2016-05
New Economics Papers: this item is included in nep-eff
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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