Productivity convergence in the European regions, 1980-2003: a sectoral and spatial approach

Jose Villaverde () and Adolfo Maza

Applied Economics, 2008, vol. 40, issue 10, 1299-1313

Abstract: This article analyses the evolution of the EU productivity between 1980 and 2003, both across regions and sectors. By making use of various techniques (cross-section, nonparametric and spatial approaches) it concludes that: (1) the regional and sectoral dispersion of productivity is quite high; (2) the gains experienced in aggregate productivity are due entirely to the sectors productivity growth effect; (3) there is a weak beta-convergence process at the aggregate and sectoral levels; (4) the accounting decomposition of the aggregate productivity convergence process reveals the sectoral productivity growth effect to be the only responsible factor for regional catching-up; (5) finally, there are clear signs of spatial dependence which, when properly addressed, increase the speed of convergence at the aggregate level.

Date: 2008
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DOI: 10.1080/00036840600771361

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