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Productivity in the euro area: any evidence of convergence?

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  • David Sondermann

Abstract

Sizable prevailing real economic disparities among countries in a currency union potentially involve costs for those countries for which the aggregate policy stance is not appropriate. This paper contributes to the literature by testing for productivity convergence among euro area countries. While no convergence can be found on the aggregate level, selected service sectors and manufacturing sub-industries indicate evidence of convergence. In a search for factors influencing productivity, investments in research and development as well as a high skill level of employees are shown to be beneficial, whereas regulations constitute a burden. Copyright Springer-Verlag Berlin Heidelberg 2014

Suggested Citation

  • David Sondermann, 2014. "Productivity in the euro area: any evidence of convergence?," Empirical Economics, Springer, vol. 47(3), pages 999-1027, November.
  • Handle: RePEc:spr:empeco:v:47:y:2014:i:3:p:999-1027
    DOI: 10.1007/s00181-013-0762-x
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    More about this item

    Keywords

    Productivity; Convergence; Panel unit root test ; Manufacturing and service sector; C33; O47; J24; L60; L80;
    All these keywords.

    JEL classification:

    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • L60 - Industrial Organization - - Industry Studies: Manufacturing - - - General
    • L80 - Industrial Organization - - Industry Studies: Services - - - General

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