Productivity clustering and growth in Central and Eastern Europe

Mihai Nitoi () and Maria Miruna Pochea ()
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Mihai Nitoi: Romanian Academy, Institute for World Economy, Bucharest, Romania
Maria Miruna Pochea: Finance Department, Babes-Bolyai University of Cluj-Napoca, Romania

Baltic Journal of Economics, 2016, vol. 16, issue 2, 132-151

Abstract: This article uses a non-linear time-varying model to test productivity convergence in 10 emerging countries within Central and Eastern Europe. The results show that the convergence algorithm has rejected the null hypothesis of convergence for all countries in most of the sectors. Also, we found evidence that the productivity clusters for total economy and other sectors are very different in terms of number and countries. Additionally, even if the productivity gaps in the region have been reduced, we still notice significant disparities between countries. The clustering algorithm shows countries which have a high productivity growth in some sectors and a low productivity growth in others. This reveals the prevalence of idiosyncratic factors in productivity determinants. Baltic countries are catching up, while other countries such as Bulgaria are underperformers.

Keywords: Labour productivity; panel convergence methodology; CEE countries; sectoral trends (search for similar items in EconPapers)
JEL-codes: C32 C33 J24 O47 O52 (search for similar items in EconPapers)
Date: 2016
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:bic:journl:v:16:y:2016:i:2:p:132-151

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