European integration, productivity growth and real convergence
AbstractThis paper derives a stochastic endogenous growth model that investigates the impact of European Union integration on convergence and productivity growth. We deviate from the general strand of literature by not only deriving a theoretical model for the effects of integration on the rate of economic growth, but also by using more appropriate estimation techniques. The outcome of a series of panel and structural break tests examining the accession process of five recent members to the Union generally show improved rates of productivity growth and convergence to EU standards. We then draw from the experience of these recent members to derive implications for the first-round EU candidate countries. Subsequent tests on the first-round candidate countries find a high level of heterogeneity in growth rates, and a fast-paced convergence to EU standards. --
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Bibliographic InfoArticle provided by Elsevier in its journal European Economic Review.
Volume (Year): 51 (2007)
Issue (Month): 6 (August)
Contact details of provider:
Web page: http://www.elsevier.com/locate/eer
Other versions of this item:
- Yigit, Taner M. & Kutan, Ali M., 2004. "European integration, productivity growth and real convergence," ZEI Working Papers B 08-2004, ZEI - Center for European Integration Studies, University of Bonn.
- M. Taner Yigit & Ali M. Kutan, 2004. "European Integration, Productivity Growth and Real Convergence," Departmental Working Papers 0402, Bilkent University, Department of Economics.
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Richard E. Baldwin & Elena Seghezza, 1996.
"Testing for Trade-Induced Investment-Led Growth,"
NBER Working Papers
5416, National Bureau of Economic Research, Inc.
- Im, Kyung So & Pesaran, M. Hashem & Shin, Yongcheol, 2003.
"Testing for unit roots in heterogeneous panels,"
Journal of Econometrics,
Elsevier, vol. 115(1), pages 53-74, July.
- Pasaran, M.H. & Im, K.S. & Shin, Y., 1995. "Testing for Unit Roots in Heterogeneous Panels," Cambridge Working Papers in Economics 9526, Faculty of Economics, University of Cambridge.
- Tom Doan, . "IPSHIN: RATS procedure to implement Im, Pesaran and Shin panel unit root test," Statistical Software Components RTS00098, Boston College Department of Economics.
- Balázs Égert & Imed Drine & Kirsten Lommatzsch & Christophe Rault, 2002.
"The Balassa-Samuelson effect in Central and Eastern Europe: Myth or reality?,"
William Davidson Institute Working Papers Series
483, William Davidson Institute at the University of Michigan.
- Egert, Balazs & Drine, Imed & Lommatzsch, Kirsten & Rault, Christophe, 2003. "The Balassa-Samuelson effect in Central and Eastern Europe: myth or reality?," Journal of Comparative Economics, Elsevier, vol. 31(3), pages 552-572, September.
- Balázs Égert & Imed Drine & Kirsten Lommatzsch & Christophe Rault, 2005. "The Balassa-Samuelson Effect in Central and Eastern Europe: Myth or Reality?," Documents de recherche 05-15, Centre d'Études des Politiques Économiques (EPEE), Université d'Evry Val d'Essonne.
- Klaus W�lde & Christina Wood, 2004.
"The empirics of trade and growth: where are the policy recommendations?,"
European Economy - Economic Papers
204, Directorate General Economic and Monetary Affairs (DG ECFIN), European Commission.
- Klaus WÃ¤lde & Christina Wood, 2004. "The empirics of trade and growth: where are the policy recommendations?," International Economics and Economic Policy, Springer, vol. 1(2), pages 275-292, January.
- Wälde, Klaus & Wood, Christina, 2000. "The empirics of trade and growth: Where are the policy recommendations?," Dresden Discussion Paper Series in Economics 09/00, Dresden University of Technology, Faculty of Business and Economics, Department of Economics.
- Klaus, WAELDE & Christina, WOOD, 2004. "The Empirics of Trade and Growth : Where are the Policy Recommendations ?," Discussion Papers (IRES - Institut de Recherches Economiques et Sociales) 2004013, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
- Henrekson, Magnus & Torstensson, Johan & Torstensson, Rasha, 1995.
"Growth Effects of European Integration,"
Working Paper Series
439, Research Institute of Industrial Economics.
- Henrekson, Magnus & Torstensson, Rasha, 1996. "Growth Effects of European Integration," CEPR Discussion Papers 1465, C.E.P.R. Discussion Papers.
- Magnus Henrekson & Johan Torstensson & Rasha Torstensson,, . "Growth Effects of European Integration," Discussion Papers 96/1, University of Nottingham, CREDIT.
- Saggi, Kamal, 2000.
"Trade, foreign direct investment, and international technology transfer : a survey,"
Policy Research Working Paper Series
2349, The World Bank.
- Kamal Saggi, 2002. "Trade, Foreign Direct Investment, and International Technology Transfer: A Survey," World Bank Research Observer, World Bank Group, vol. 17(2), pages 191-235, September.
- Martin Cihak & Tomas Holub, 2003. "Price Convergence to the EU: What Do the 1999 ICP Data Tell Us?," Working Papers 2003/02, Czech National Bank, Research Department.
- Ben S. Bernanke & Refet S. Gurkaynak, 2001.
"Is Growth Exogenous? Taking Mankiw, Romer and Weil Seriously,"
NBER Working Papers
8365, National Bureau of Economic Research, Inc.
- Ben S. Bernanke & Refet S. Gürkaynak, 2002. "Is Growth Exogenous? Taking Mankiw, Romer, and Weil Seriously," NBER Chapters, in: NBER Macroeconomics Annual 2001, Volume 16, pages 11-72 National Bureau of Economic Research, Inc.
- Barrell, Ray & Pain, Nigel, 1999. "Domestic institutions, agglomerations and foreign direct investment in Europe," European Economic Review, Elsevier, vol. 43(4-6), pages 925-934, April.
- Barrell, Ray & Pain, Nigel, 1997. "Foreign Direct Investment, Technological Change, and Economic Growth within Europe," Economic Journal, Royal Economic Society, vol. 107(445), pages 1770-86, November.
- Rivera-Batiz, Luis A & Romer, Paul M, 1991.
"Economic Integration and Endogenous Growth,"
The Quarterly Journal of Economics,
MIT Press, vol. 106(2), pages 531-55, May.
- Sebnem Kalemli-Ozcan & Laura Alfaro & Selin Sayek & Areendam Chanda, 2002.
"FDI and Economic Growth: The Role of Local Financial Markets,"
- Alfaro, Laura & Chanda, Areendam & Kalemli-Ozcan, Sebnem & Sayek, Selin, 2004. "FDI and economic growth: the role of local financial markets," Journal of International Economics, Elsevier, vol. 64(1), pages 89-112, October.
- Wagner, Martin & Hlouskova, Jaroslava, 2001.
"The CEEC10's Real Convergence Prospects,"
Transition Economics Series
20, Institute for Advanced Studies.
- Boldrin, Michele & Canova, Fabio, 2003. "Regional Policies and EU Enlargement," CEPR Discussion Papers 3744, C.E.P.R. Discussion Papers.
- Joeri Gorter & S. Ederveen, 2002. "Does European cohesion policy reduce regional disparities? An empirical analysis," CPB Discussion Paper 15, CPB Netherlands Bureau for Economic Policy Analysis.
- Perron, P, 1988.
"The Great Crash, The Oil Price Shock And The Unit Root Hypothesis,"
338, Princeton, Department of Economics - Econometric Research Program.
- Perron, Pierre, 1989. "The Great Crash, the Oil Price Shock, and the Unit Root Hypothesis," Econometrica, Econometric Society, vol. 57(6), pages 1361-1401, November.
- Anthony J. Richards & Gunnar Tersman, 1995.
"Growth, Nontradables, and Price Convergence in the Baltics,"
IMF Working Papers
95/45, International Monetary Fund.
- Richards, Anthony J. & Tersman, Gunnar H. R., 1996. "Growth, Nontradables, and Price Convergence in the Baltics," Journal of Comparative Economics, Elsevier, vol. 23(2), pages 121-145, October.
- Durham, J.B.J. Benson, 2004. "Absorptive capacity and the effects of foreign direct investment and equity foreign portfolio investment on economic growth," European Economic Review, Elsevier, vol. 48(2), pages 285-306, April.
- Perron, P. & Bai, J., 1995.
"Estimating and Testing Linear Models with Multiple Structural Changes,"
Cahiers de recherche
9552, Centre interuniversitaire de recherche en économie quantitative, CIREQ.
- Jushan Bai & Pierre Perron, 1998. "Estimating and Testing Linear Models with Multiple Structural Changes," Econometrica, Econometric Society, vol. 66(1), pages 47-78, January.
- Perron, P. & Bai, J., 1995. "Estimating and Testing Linear Models with Multiple Structural Changes," Cahiers de recherche 9552, Universite de Montreal, Departement de sciences economiques.
- TomÃ¡s Holub & Martin CihÃ¡k, 2001. "Convergence of Relative Prices and Inflation in Central and Eastern Europe," IMF Working Papers 01/124, International Monetary Fund.
- Jesus Crespo Cuaresma & Doris Ritzberger-Grunwald & Maria Antoinette Silgoner, 2008.
"Growth, convergence and EU membership,"
Taylor & Francis Journals, vol. 40(5), pages 643-656.
- Fidrmuc, Jarko & Reininger, Thomas & Backé, Peter & Schardax, Franz, 2002. "Price Dynamics in Central and Eastern European EU Accession," Working Papers 61, Oesterreichische Nationalbank (Austrian Central Bank).
- Robert E. Baldwin, 2000. "Trade and Growth: Still Disagreement about the Relationships," OECD Economics Department Working Papers 264, OECD Publishing.
- Gao, Ting, 2005. "Foreign direct investment and growth under economic integration," Journal of International Economics, Elsevier, vol. 67(1), pages 157-174, September.
- Caves, Douglas W & Christensen, Laurits R & Diewert, W Erwin, 1982. "The Economic Theory of Index Numbers and the Measurement of Input, Output, and Productivity," Econometrica, Econometric Society, vol. 50(6), pages 1393-1414, November.
- Borensztein, E. & De Gregorio, J. & Lee, J-W., 1998.
"How does foreign direct investment affect economic growth?1,"
Journal of International Economics,
Elsevier, vol. 45(1), pages 115-135, June.
- Eduardo Borensztein & Jose De Gregorio & Jong-Wha Lee, 1995. "How Does Foreign Direct Investment Affect Economic Growth?," NBER Working Papers 5057, National Bureau of Economic Research, Inc.
- Timothy J. Vogelsang, 1998. "Trend Function Hypothesis Testing in the Presence of Serial Correlation," Econometrica, Econometric Society, vol. 66(1), pages 123-148, January.
- Gul Ertan Ozguzer & Luca Pensieroso, 2010.
"Worthy Transfers? A Dynamic Analysis of Turkey's Accession to the European Union,"
1003, Izmir University of Economics.
- Gül Ertan Özgüzer, 2009. "Worthy Transfers? A Dynamic Analysis of Turkey's Accession to the European Union," 2009 Meeting Papers 781, Society for Economic Dynamics.
- Gul ERTAN OZGUZER & Luca PENSIEROSO, 2009. "Worthy Transfers ? A Dynamic Analysis of Turkey’s Accession to the European Union," Discussion Papers (IRES - Institut de Recherches Economiques et Sociales) 2009029, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
- Chun-Ping Chang & Chien-Chiang Lee & Meng-Chi Hsieh, 2011. "Globalization, Real Output and Multiple Structural Breaks," Global Economic Review, Taylor & Francis Journals, vol. 40(4), pages 421-444, December.
- Spruk, Rok, 2011. "Productivity and income convergence in transition: theory and evidence from Central Europe," MPRA Paper 33389, University Library of Munich, Germany.
- Kutan, Ali M. & Yigit, Taner M., 2009. "European integration, productivity growth and real convergence: Evidence from the new member states," Economic Systems, Elsevier, vol. 33(2), pages 127-137, June.
- Filippetti, Andrea & Payrache, Antonio, 2010. "Productivity growth and catch up in Europe: A new perspective on total factor productivity differences," MPRA Paper 27212, University Library of Munich, Germany.
- Kocenda, Evzen & Kutan, Ali M. & Yigit, Taner M., 2008. "Fiscal convergence in the European Union," The North American Journal of Economics and Finance, Elsevier, vol. 19(3), pages 319-330, December.
- Davor Mikulic & Ivan Kovac, 2012. "The Role Of International Trade In Convergence Process," Montenegrin Journal of Economics, Economic Laboratory for Transition Research (ELIT), vol. 8(4), pages 7-26.
- Azomahou, Theophile T. & El Ouardighi, Jalal & Nguyen-Van, Phu & Kim Cuong Pham, Thi, 2010.
"Convergence of European Regions: A Reappraisal,"
MERIT Working Papers
029, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
- Iwasaki, Ichiro & Tokunaga, Masahiro, 2013. "Macroecnomic Impacts of FDI in Transition Economies: A Meta-Study," RRC Working Paper Series 39, Russian Research Center, Institute of Economic Research, Hitotsubashi University.
- Herrmann, Sabine & Jochem, Axel, 2005. "Determinants of current account developments in the central and east European EU member states - consequences for the enlargement of the euro area," Discussion Paper Series 1: Economic Studies 2005,32, Deutsche Bundesbank, Research Centre.
- Sassi, Maria & Pecci, Francesco, 2008. "Agricultural and Economic Convergence in the EU Integration Process: Do Geographical Relationships Matter?," 2008 International Congress, August 26-29, 2008, Ghent, Belgium 44459, European Association of Agricultural Economists.
- Jalal El Ouardighi & Rabija Somun-Kapetanovic, 2009. "Convergence and Inequality of income: the case of Western Balkan countries," European Journal of Comparative Economics, Cattaneo University (LIUC), vol. 6(2), pages 207-225, December.
- Azomahou, Théophile T. & El ouardighi, Jalal & Nguyen-Van, Phu & Pham, Thi Kim Cuong, 2011. "Testing convergence of European regions: A semiparametric approach," Economic Modelling, Elsevier, vol. 28(3), pages 1202-1210, May.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.