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TFP Growth in Old and New Europe

Author

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  • Michael C Burda

    ([1] Institut für Wirtschaftstheorie II, Universit&aauml;t zu Berlin, Spandauer Straße 1, 10178 Berlin, Germany.[2] Centre for Economic Policy Research (CEPR), London, UK.[3] Institute for the Study of Labor (IZA), Bonn, Germany.)

  • Battista Severgnini

    ([1] Institut für Wirtschaftstheorie II, Universit&aauml;t zu Berlin, Spandauer Straße 1, 10178 Berlin, Germany.[2] Centre for Economic and Business Research (CEBR), Copenhagen, Denmark.)

Abstract

Using Solow-Törnqvist residuals as well as two alternative measurements, we present the estimates of total factor productivity (TFP) growth in a sample of 30 European economies for the period 1994–2004. In most of Western Europe, we find a deceleration of TFP growth since 2000. However, the economies of ‘New Europe’ exhibit a higher level of TFP growth overall and have slowed less than those of ‘Old Europe’. In the new market economies of Central and Eastern Europe, we find both high TFP growth as well as acceleration in the second half of the sample. Regression evidence from Western Europe suggests that product market regulation may adversely affect TFP growth and may thus impair convergence.

Suggested Citation

  • Michael C Burda & Battista Severgnini, 2009. "TFP Growth in Old and New Europe," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 51(4), pages 447-466, December.
    • Handle: RePEc:pal:compes:v:51:y:2009:i:4:p:447-466
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    More about this item

    JEL classification:

    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • P27 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - Performance and Prospects

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