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Impact of the transition on the TFP in Croatia

Author

Listed:
  • Irena Raguž

    (Faculty of Economics and Business, University of Zagreb)

  • Ivo Družić

    (Faculty of Economics and Business, University of Zagreb)

  • Josip Tica

    (Faculty of Economics and Business, University of Zagreb)

Abstract

In this paper we investigate the impact transition had on the total factor productivity in Croatia. The analyzed data cover the period from 1952 to 2008. Our sample is interesting for several reasons. It includes first estimates of physical capital for Croatia in the pretransition period. In addition to new physical capital series used in the estimation of Croatian TFP, labor has been used in three different forms: as raw labor and as labor corrected with two alternative proxies of human capital. The obtained data enable us to investigate how the introduction of market mechanisms in the early nineties affected total factor productivity. After deriving the TFP values using growth accounting methodology, we investigate how the contribution of TFP to GDP growth changed with the beginning of transition. In addition, we conduct structural break analysis, taking into an account, not only transition process but the pretransition period as well. Results suggest that transition had a positive impact on total factor productivity growth rates, but not on the share of TFP in the GDP growth rate.

Suggested Citation

  • Irena Raguž & Ivo Družić & Josip Tica, 2012. "Impact of the transition on the TFP in Croatia," EFZG Working Papers Series 1205, Faculty of Economics and Business, University of Zagreb.
    • Handle: RePEc:zag:wpaper:1205
    as

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    File URL: http://web.efzg.hr/repec/pdf/Clanak%2012-05.pdf
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    References listed on IDEAS

    as
    1. Jushan Bai & Pierre Perron, 1998. "Estimating and Testing Linear Models with Multiple Structural Changes," Econometrica, Econometric Society, vol. 66(1), pages 47-78, January.
    2. Andrews, Donald W K & Ploberger, Werner, 1994. "Optimal Tests When a Nuisance Parameter Is Present Only under the Alternative," Econometrica, Econometric Society, vol. 62(6), pages 1383-1414, November.
    3. Jushan Bai & Pierre Perron, 2003. "Computation and analysis of multiple structural change models," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 18(1), pages 1-22.
    4. Jushan Bai & Pierre Perron, 2003. "Critical values for multiple structural change tests," Econometrics Journal, Royal Economic Society, vol. 6(1), pages 72-78, June.
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    Cited by:

    1. Zajc Petranović, Matea & Tomas, Željka & Smolej Narančić, Nina & Škarić-Jurić, Tatjana & Veček, Andrea & Miličić, Jasna, 2014. "A six decades long follow-up on body size in adolescents from Zagreb, Croatia (1951–2010)," Economics & Human Biology, Elsevier, vol. 13(C), pages 155-164.

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    More about this item

    Keywords

    total factor productivity; transition; growth accounting; structural breaks;
    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
    • P24 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - National Income, Product, and Expenditure; Money; Inflation
    • N14 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - Europe: 1913-

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