Total factor productivity convergence in German states since reunification: Evidence and explanations
Michael Burda () and
Battista Severgnini ()
Journal of Comparative Economics, 2018, vol. 46, issue 1, 192-211
A quarter-century after reunification, labor productivity in the states of eastern Germany continues to lag systematically behind the West. Persistent gaps in total factor productivity (TFP) are the proximate cause; conventional and capital-free measurements confirm a sharp slowdown in TFP growth after 1995. Strikingly, eastern capital intensity, especially in industry, exceeds values in the West, casting doubt on the embodied technology hypothesis. TFP growth is negatively associated with rates of investment expenditures. The stubborn East-West TFP gap is best explained by low concentration of managers, low startup intensity and the distribution of firm size in the East rather than R&D activities.
Keywords: Development accounting; Productivity; Regional convergence; German reunification (search for similar items in EconPapers)
JEL-codes: D24 E01 E22 O33 O47 (search for similar items in EconPapers)
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (16) Track citations by RSS feed
Downloads: (external link)
Full text for ScienceDirect subscribers only
Working Paper: Total Factor Productivity Convergence in German States since Reunification: Evidence and Explanations (2017)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:eee:jcecon:v:46:y:2018:i:1:p:192-211
Access Statistics for this article
Journal of Comparative Economics is currently edited by D. Berkowitz and G. Roland
More articles in Journal of Comparative Economics from Elsevier
Bibliographic data for series maintained by Nithya Sathishkumar ().