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Unraveling the Origins of EU Countries Productivity Growth - Evidence on R&D and Competition from Cross-Country Industry Analysis

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  • Thomas Strobel

Abstract

Over the last two decades EU countries experienced diverging productivity growthdevelopments. By examining the sources of EU countries growth drivers on the sectorallevel, the paper takes a new look on the influence of innovations. While standard neoclassicalNon-ICT capital deepening turns out the major contributor to EU productivitygrowth, detail industry analysis reveals that growth in innovation stocks via increasedR&D in specialized and science-based industries spurred productivity growth as well.But those effects are only found for Nordic and Western Continental EU countries,while others are lacking such effects. Moreover, these specialized and science-basedindustries experienced strong innovation and productivity growth by decreases in competition,thereby favoring Schumpeterian growth arguments for highly dynamic sectors.

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Bibliographic Info

Paper provided by Ifo Institute for Economic Research at the University of Munich in its series Ifo Working Paper Series with number Ifo Working Paper Nr. 86.

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Date of creation: 2010
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Handle: RePEc:ces:ifowps:_86

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Related research

Keywords: Productivity growth; market structure; competition; innovation; R&D; panel data; industry analysis;

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  1. Dasgupta, Partha & Stiglitz, Joseph, 1980. "Industrial Structure and the Nature of Innovative Activity," Economic Journal, Royal Economic Society, vol. 90(358), pages 266-93, June.
  2. Stephen Nickell, 1993. "Competition and Corporate Performance," CEP Discussion Papers dp0182, Centre for Economic Performance, LSE.
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  5. Philippe Aghion & Nicholas Bloom & Richard Blundell & Rachel Griffith & Peter Howitt, 2002. "Competition and Innovation: An Inverted U Relationship," NBER Working Papers 9269, National Bureau of Economic Research, Inc.
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  8. Loury, Glenn C, 1979. "Market Structure and Innovation," The Quarterly Journal of Economics, MIT Press, vol. 93(3), pages 395-410, August.
  9. Romer, Paul M, 1990. "Endogenous Technological Change," Journal of Political Economy, University of Chicago Press, vol. 98(5), pages S71-102, October.
  10. John Scott, 1984. "Firm versus Industry Variability in R&D Intensity," NBER Chapters, in: R & D, Patents, and Productivity, pages 233-248 National Bureau of Economic Research, Inc.
  11. Arellano, Manuel & Bover, Olympia, 1995. "Another look at the instrumental variable estimation of error-components models," Journal of Econometrics, Elsevier, vol. 68(1), pages 29-51, July.
  12. Maddala, G S & Wu, Shaowen, 1999. " A Comparative Study of Unit Root Tests with Panel Data and a New Simple Test," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 61(0), pages 631-52, Special I.
  13. Pavitt, Keith, 1984. "Sectoral patterns of technical change: Towards a taxonomy and a theory," Research Policy, Elsevier, vol. 13(6), pages 343-373, December.
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