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European integration, productivity growth and real convergence

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  • Kutan, Ali M.
  • Yigit, Taner M.

Abstract

This 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. --

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Bibliographic Info

Article provided by Elsevier in its journal European Economic Review.

Volume (Year): 51 (2007)
Issue (Month): 6 (August)
Pages: 1370-1395

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Handle: RePEc:eee:eecrev:v:51:y:2007:i:6:p:1370-1395

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Citations

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Cited by:
  1. 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.
  2. 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.
  3. 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.
  4. 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.
  5. 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.
  6. 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.
  7. 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.
  8. Spruk, Rok, 2011. "Productivity and income convergence in transition: theory and evidence from Central Europe," MPRA Paper 33389, University Library of Munich, Germany.
  9. 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.
  10. 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.
  11. 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.

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