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Productivity growth and catch up in Europe: A new perspective on total factor productivity differences

Andrea Filippetti (andrea.filippetti@cnr.it) and Antonio Payrache

MPRA Paper from University Library of Munich, Germany

Abstract: This paper investigates the relative contribution of capital deepening and total factor productivity (TFP) as drivers of labour productivity growth and catch up in Europe. Proxies for technological capabilities (technology gap) are introduced which allow to explain differences in TFP. Using a conditional Malmquist nonparametric approach, we find that capital deepening and TFP respectively account for around 53% and 47% of labour productivity growth respectively. Further, change in technological capabilities explains 71% of change in TFP, making a substantial contribution to catch up. Different patterns arise between industrialized and catching-up countries. Our results support the scope for innovation policy, technology diffusion and education policy to explain growth and convergence in labour productivity across Europe.

Keywords: labour productivity growth; technological capabilities; EU policies; Malmquist TFP (search for similar items in EconPapers)
JEL-codes: E23 O33 O47 (search for similar items in EconPapers)
Date: 2010-12-07
New Economics Papers: this item is included in nep-eec, nep-eff, nep-eur and nep-fdg
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:27212

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