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TFP convergence across European regions

Author

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  • Adriana Di Liberto
  • Stefano Usai
Abstract
This paper proposes a fixed-effect panel methodology that enables us to simultaneously take into account both TFP convergence and the traditional neoclassical-type of convergence. We analyse a sample of 199 European regions between 1985 and 2006 and find the absence of an overall process of TFP convergence as we observe that TFP dispersion is virtually constant across two different subperiods. However, the absence of a strong process of TFP convergence hides interesting and complex dynamic patterns across regions as we observe significant changes in countries ranking. These results suggest that while obtaining fast growth in TFP is not simple, it appears to be a key factor in achieving fast GDP per capita growth. They also suggests a role for geography in the observed dynamics. Our results are robust to the use of different estimation procedures such as simple LSDV, Kiviet-corrected LSDV, and GMM á la Arellano and Bond.

Suggested Citation

  • Adriana Di Liberto & Stefano Usai, 2011. "TFP convergence across European regions," ERSA conference papers ersa10p409, European Regional Science Association.
    • Handle: RePEc:wiw:wiwrsa:ersa10p409
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    File URL: https://www-sre.wu.ac.at/ersa/ersaconfs/ersa10/ERSA2010finalpaper409.pdf
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    References listed on IDEAS

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    Cited by:

    1. Francesco Aiello & Fernanda Ricotta, 2014. "Firm heterogeneity in productivity across Europe. What explains what?," ERSA conference papers ersa14p808, European Regional Science Association.
    2. Johanna Vogel, 2015. "The two faces of R&D and human capital: Evidence from Western European regions," Papers in Regional Science, Wiley Blackwell, vol. 94(3), pages 525-551, August.
    3. Edinaldo Tebaldi, 2016. "The Dynamics of Total Factor Productivity and Institutions," Journal of Economic Development, Chung-Ang Unviersity, Department of Economics, vol. 41(4), pages 1-25, December.

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