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Total Factor Productivity Growth, Structural Change and Convergence in the New Members of the European Union

Author

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  • El-hadj M Bah

    (Department of Economics, University of Auckland, Private Bag 92019 Auckland, New Zealand)

  • Josef C Brada

    ([1] Department of Economics, Arizona State University, Box 873806, Tempe, AZ, 852870-3806, USA[2] Macedonian Academy of Sciences and Arts, Bul. Krste Misirkov 2, 1000 Skopje, Republic of Macedonia)

Abstract

We estimate total factor productivity (TFP) growth in agriculture, industry and services in new European Union member countries and show how structural change contributes to growth. Because of the difficulties in measuring the capital stock of transition economies, we develop a model that estimates sectoral TFPs from data on sectoral employment and GDP per capita. Compared to Austria, new EU members have lower TFP levels, but their TFP growth is largely higher. Inter-sectoral movements of labour do not play a large role in aggregate TFP growth, and capital accumulation is an important component of convergence to EU levels of per capita GDP.

Suggested Citation

  • El-hadj M Bah & Josef C Brada, 2009. "Total Factor Productivity Growth, Structural Change and Convergence in the New Members of the European Union," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 51(4), pages 421-446, December.
    • Handle: RePEc:pal:compes:v:51:y:2009:i:4:p:421-446
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    Citations

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    Cited by:

    1. Butzer, Rita & Mundlak, Yair & Larson, Donald F., 2010. "Measures of Fixed Capital in Agriculture," Discussion Papers 290011, Hebrew University of Jerusalem, Department of Agricultural Economics and Management.
    2. Tomas Balezentis & Vaida Sapolaite, 2022. "Productivity surplus and its distribution in Lithuanian agriculture," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 49(3), pages 721-740, August.
    3. Pawel Dobrzanski & Wojciech Grabowski, 2019. "Structural and productivity changes of Central and Eastern Europe," Zbornik radova Ekonomskog fakulteta u Rijeci/Proceedings of Rijeka Faculty of Economics, University of Rijeka, Faculty of Economics and Business, vol. 37(2), pages 427-471.
    4. Borgersen, Trond-Arne & King, Roswitha M., 2014. "Structural origins of debt-sustainability in mature and transition economies: Domar, Balassa–Samuelson and Maastricht," Structural Change and Economic Dynamics, Elsevier, vol. 30(C), pages 101-119.
    5. Irena Raguž Krištiæ & Ivo Družiæ & Josip Tica, 2016. "Impact of the transition on the total factor productivity in Croatia," Zbornik radova Ekonomskog fakulteta u Rijeci/Proceedings of Rijeka Faculty of Economics, University of Rijeka, Faculty of Economics and Business, vol. 34(2), pages 271-308.
    6. Hsu Sara & Carolina Alba & Simon Melchor, 2016. "China’s structural transformation: reaching potential GDP in the financial services sector," China Finance and Economic Review, De Gruyter, vol. 5(2), pages 37-57, June.
    7. Wen Xiao & Jia-Dong Pan & Li-Yun Liu, 2018. "China’S Industrial Structure Upgrade In The “New Normal”: Empirical Test And Determinants," The Singapore Economic Review (SER), World Scientific Publishing Co. Pte. Ltd., vol. 63(04), pages 1037-1058, September.
    8. Borgersen, Trond-Arne & King, Roswitha M., 2015. "Endogenous supply side constraints to export-led growth and aggregate growth implications in transition economies," Structural Change and Economic Dynamics, Elsevier, vol. 33(C), pages 96-109.
    9. Jarosław Brodny & Magdalena Tutak, 2022. "Assessing the Level of Innovation of Poland from the Perspective of Regions between 2010 and 2020," JOItmC, MDPI, vol. 8(4), pages 1-28, October.
    10. awel Dobrzanski & Sebastian Bobowski, 2021. "Structural and Productivity Changes in the European Countries During COVID-19 Pandemic," European Research Studies Journal, European Research Studies Journal, vol. 0(Special 3), pages 872-882.
    11. Herrendorf, Berthold & Rogerson, Richard & Valentinyi, Ákos, 2014. "Growth and Structural Transformation," Handbook of Economic Growth, in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 2, chapter 6, pages 855-941, Elsevier.
    12. Trond-Arne Borgersen & Roswitha M. King, 2016. "Industrial structure and jobless growth in transition economies," Post-Communist Economies, Taylor & Francis Journals, vol. 28(4), pages 520-536, October.
    13. Zsuzsanna Novák, 2020. "Structural Change in Central and South Eastern Europe—Does Technological Efficiency Harm the Labour Market?," Sustainability, MDPI, vol. 12(11), pages 1-22, June.
    14. Bo Wang & Limin Han & Hongzhi Zhang, 2021. "Analysis on the structure effect of marine fishery total factor productivity under high-quality development in China," PLOS ONE, Public Library of Science, vol. 16(11), pages 1-19, November.
    15. Ilya B. Voskoboynikov, 2023. "Sources of productivity growth in Eastern Europe and Russia before the global financial crisis," Journal of Productivity Analysis, Springer, vol. 59(3), pages 225-241, June.
    16. Maciej Grodzicki, 2013. "Productivity Convergence in Manufacturing in the European Union: The Role of Economic Structure," Research in Economics and Business: Central and Eastern Europe, Tallinn School of Economics and Business Administration, Tallinn University of Technology, vol. 5(2).
    17. El-hadj Bah & Josef C. Brada, 2014. "Labor Markets in the Transition Economies: An Overview," European Journal of Comparative Economics, Cattaneo University (LIUC), vol. 11(1), pages 3-53, June.
    18. Agnieszka Gehringer & Inmaculada Martínez-Zarzoso & Felicitas Nowak-Lehmann Danzinger, 2016. "What are the drivers of total factor productivity in the European Union?," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 25(4), pages 406-434, June.
    19. Konya Istvan, 2013. "Development accounting with wedges: the experience of six European countries," The B.E. Journal of Macroeconomics, De Gruyter, vol. 13(1), pages 245-286, June.
    20. Hubert Gabrisch, 2021. "The long-run properties of the Kaldor–Verdoorn law: a bounds test approach to a panel of Central and East European (CEE) countries," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 48(1), pages 101-121, February.
    21. Kónya, István, 2011. "Növekedés és felzárkózás Magyarországon, 1995-2009 [Growth and convergence in Hungary, 1995-2009]," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(5), pages 393-411.
    22. Robert Price & Andreas Wörgötter, 2011. "Estonia: Making the Most of Globalisation," OECD Economics Department Working Papers 876, OECD Publishing.
    23. Yuriy Bilenko, 2022. "Economic Growth And Total Factor Productivity In Central And Eastern European Countries Between Two Global Crises And Beyond," Baltic Journal of Economic Studies, Publishing house "Baltija Publishing", vol. 8(4).

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