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Portugal: A Paradox in Productivity

Author

Listed:
  • Ricardo Pineheiro Alves

Abstract

Portugal has a lower level of productivity than advanced economies but, paradoxically, the recent improvement in several of its determinants did not lead to convergence in productivity levels. The objective of this paper is to better understand the larger slowdown in productivity growth in Portugal than the one occurring in those countries by considering its main determinants. It presents a set of different reasons for the divergence with developed economies since the mid-1990s that are associated with an increasing misallocation of capital, labour and skills both at a sectoral and firm level. Moreover, it outlines some policy proposals to enhance aggregate productivity growth in the Portuguese economy within a framework of growing integration in global markets.

Suggested Citation

  • Ricardo Pineheiro Alves, 2017. "Portugal: A Paradox in Productivity," International Productivity Monitor, Centre for the Study of Living Standards, vol. 32, pages 137-160, Spring.
    • Handle: RePEc:sls:ipmsls:v:32:y:2017:8
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    File URL: http://www.csls.ca/ipm/32/Alves%20Version%202.pdf
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    Citations

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    Cited by:

    1. Francisco Pérez & Eva Benages, 2017. "The Role of Capital Accumulation in the Evolution of Total Factor Productivity in Spain," International Productivity Monitor, Centre for the Study of Living Standards, vol. 33, pages 24-50, Fall.
    2. Natália Barbosa & Ana Paula faria, 2022. "Digital adoption and productivity: understanding micro drivers of the aggregate effect," GEE Papers 0162, Gabinete de Estratégia e Estudos, Ministério da Economia, revised Jun 2022.
    3. Ricardo Pinheiro Alves & Nuno Tavares & Gabriel Osório de Barros, 2023. "Revisitar as Empresas Zombie em Portugal (2008-2021)," GEE Papers 178, Gabinete de Estratégia e Estudos, Ministério da Economia, revised Oct 2023.
    4. Elías Melchor-Ferrer, 2020. "Determinants of labour productivity growth in Spanish and Portuguese regions: a spatial shift-share approach," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 65(1), pages 45-65, August.
    5. Tânia Pinto & Aurora Teixeira, 2023. "Does scientific research output matter for Portugal’s economic growth?," GEE Papers 0174, Gabinete de Estratégia e Estudos, Ministério da Economia, revised Jul 2023.

    More about this item

    Keywords

    Productivity; OECD; Policies; Global Productivity; Total Factor Productivity; Wages; Portugal; misallocation of capital; economic divergence;
    All these keywords.

    JEL classification:

    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • O52 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Europe
    • E22 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Investment; Capital; Intangible Capital; Capacity
    • F6 - International Economics - - Economic Impacts of Globalization

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