Industrial Growth and Productivity Change in German Cities: A Multilevel Investigation

Stephan Hitzschke ()
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Stephan Hitzschke: Technische Universität Darmstadt

A chapter in The Evolution of Economic and Innovation Systems, 2015, pp 483-550 from Springer

Abstract: Abstract The role of productivity change and city-specific characteristics on economic growth are analyzed for German cities. Productivity change is measured by the Malmquist index and its components, which are estimated by non-parametric data envelopment analysis. The nested structure as well as the interaction between industries within cities and over time is accounted for by estimating multilevel models. It is shown that there are differences for industrial growth for different cities and years. Therefore, the use of multilevel models is required. Schumpeter’s creative destruction is found to hold for efficiency change on industrial growth. Efficiency change measures the catching-up to the best practice production function, reducing both value added growth and employment growth. Technological progress shifts the best practice production function and leads only to a rise in value added growth and not in employment growth. The estimations indicate a converging growth of urban industrial value added while employment growth diverges.

Keywords: Data Envelopment Analysis; Multilevel Model; Gini Coefficient; Employment Growth; Productivity Change (search for similar items in EconPapers)
Date: 2015
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Persistent link: https://EconPapers.repec.org/RePEc:spr:eccchp:978-3-319-13299-0_20

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DOI: 10.1007/978-3-319-13299-0_20

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