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Productivity clustering and growth in Central and Eastern Europe

Author

Listed:
  • Mihai Nitoi

    (Romanian Academy, Institute for World Economy, Bucharest, Romania)

  • Maria Miruna Pochea

    (Finance Department, Babes-Bolyai University of Cluj-Napoca, Romania)

Abstract

This article uses a non-linear time-varying model to test productivity convergence in 10 emerging countries within Central and Eastern Europe. The results show that the convergence algorithm has rejected the null hypothesis of convergence for all countries in most of the sectors. Also, we found evidence that the productivity clusters for total economy and other sectors are very different in terms of number and countries. Additionally, even if the productivity gaps in the region have been reduced, we still notice significant disparities between countries. The clustering algorithm shows countries which have a high productivity growth in some sectors and a low productivity growth in others. This reveals the prevalence of idiosyncratic factors in productivity determinants. Baltic countries are catching up, while other countries such as Bulgaria are underperformers.

Suggested Citation

  • Mihai Nitoi & Maria Miruna Pochea, 2016. "Productivity clustering and growth in Central and Eastern Europe," Baltic Journal of Economics, Baltic International Centre for Economic Policy Studies, vol. 16(2), pages 132-151.
    • Handle: RePEc:bic:journl:v:16:y:2016:i:2:p:132-151
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    File URL: http://www.tandfonline.com/doi/full/10.1080/1406099X.2016.1189267
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    Citations

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    Cited by:

    1. 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.

    More about this item

    Keywords

    Labour productivity; panel convergence methodology; CEE countries; sectoral trends;
    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
    • O52 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Europe
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models
    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models

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