What are the drivers of total factor productivity in the European Union?

Agnieszka Gehringer (), Inmaculada Martínez-Zarzoso and Felicitas Nowak-Lehmann Danzinger
Authors registered in the RePEc Author Service: Felicitas Nowak-Lehmann D.

Economics of Innovation and New Technology, 2016, vol. 25, issue 4, 406-434

Abstract: This paper examines the evolution of total factor productivity (TFP) over time, as well as across countries and sectors, and investigates its determinants. To this end, a panel data set of 17 European Union (EU) countries and 13 sectors over the period 1995--2007 is used as part of a twofold approach. First, we estimate aggregate and sectoral TFP for 17 EU countries by means of the augmented mean group estimator to control for endogeneity, cross-section dependence and heterogeneous production technologies. Second, we investigate the relative importance of the drivers of predicted TFP using a dynamic ordinary least-squares estimator. The results indicate that rationalization, human capital and information and communication technologies are the main drivers of TFP.

Date: 2016
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Citations: View citations in EconPapers (6)

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DOI: 10.1080/10438599.2015.1067007

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