Globalisation and Technological Convergence in the EU

Camilla Mastromarco (), Laura Serlenga () and Yongcheol Shin

No 41, SERIES from Dipartimento di Economia e Finanza - Università degli Studi di Bari "Aldo Moro"

Abstract: We employ a two-step approach in investigating the dynamic transmission chan- nels under which globalization factors foster technical efficiency by combining a dynamic efficiency analysis in the stochastic frontier framework, and a time series approach based on VAR and spectral analysis. Using the dataset of the 18 EU countries over 1970-2004, we find that both import and FDI are significant factors in spreading efficiency externalities and thus accelerating technology catch-up in the EU. In particular, the impacts of the import are more prominent in the short-run while those of FDI play a more important role over the longer-run. Furthermore, the impacts of the import are pro-cyclical only in the short-run whereas those of FDI are pro-cyclical mostly over the medium- to the long-run. This evidence is broadly consistent with the sample observation that the recent slowdown of the EU productivity has been closely related to the corresponding FDI decline espe- cially after 2000. Hence, any protection-oriented policy will be likely to be more detrimental for the EU.

Keywords: Stochastic Frontier in Heterogeneous Panels; Time-Varying Efficiency; Globalisation Factors; Unobserved Factors; Spectral and Impulse Response Analyses (search for similar items in EconPapers)
JEL-codes: C13 C33 D24 O47 (search for similar items in EconPapers)
Pages: 277
Date: 2012-03, Revised 2012-03
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Journal Article: Globalisation and technological convergence in the EU (2013)
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