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Total factor productivity growth in Central and Eastern Europe before, during and after the Global Financial Crisis

Author

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  • Natalja Levenko
  • Kaspar Oja
  • Karsten Staehr

Abstract

This paper conducts growth accounting for 11 EU countries from Central and Eastern Europe for the years 1996–2016. Its contributions include the estimation of new capital stock series, adjustment for the utilisation of the capital stock and a time-varying elasticity of output to capital. Before the crisis, growth in total factor productivity (TFP) was the main contributor to output growth in Slovenia, Hungary and Slovakia, while capital deepening was more important in the Czech Republic, Croatia and Poland. During the global financial crisis the contributions of TFP and capital growth differed markedly across the countries, reflecting the very diverse dynamics of the crisis. After the crisis the contribution of TFP growth has been negligible in all of the sample countries coinciding with generally weak output growth. The results are generally robust to changes in estimation methods and parametrisations, but some assumptions are critical for the results.

Suggested Citation

  • Natalja Levenko & Kaspar Oja & Karsten Staehr, 2017. "Total factor productivity growth in Central and Eastern Europe before, during and after the Global Financial Crisis," Bank of Estonia Working Papers wp2017-8, Bank of Estonia, revised 09 Nov 2017.
    • Handle: RePEc:eea:boewps:wp2017-8
    DOI: 10.23656/25045520/82017/0147
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    Cited by:

    1. Jaan Masso & Vladyslav Soloviov & Kerly Espenberg & Inta Mierina, 2019. "Social convergence of the Baltic states within the enlarged EU: Is limited social dialogue an impediment?," Chapters, in: Daniel Vaughan-Whitehead (ed.), Towards Convergence in Europe, chapter 2, pages 35-77, Edward Elgar Publishing.
    2. Cho, Sang-Wook (Stanley) & Díaz, Julián P., 2018. "The dynamics of trade margins: Evidence from the European integration," Economics Letters, Elsevier, vol. 167(C), pages 90-96.
    3. Munusamy, Subramaniam & Rajamoorthy, Yogambigai, 2020. "Factor Accumulation and Total Factor Productivity Growth: ASEAN Economies," Jurnal Ekonomi Malaysia, Faculty of Economics and Business, Universiti Kebangsaan Malaysia, vol. 54(2), pages 67-76.
    4. Wroński Marcin, 2019. "The productivity growth slowdown in advanced economies: causes and policy recommendations," International Journal of Management and Economics, Warsaw School of Economics, Collegium of World Economy, vol. 55(4), pages 391-406, December.
    5. Viktória Endrődi-Kovács & Gábor Kutasi & Anikó Magasházi, 2018. "Visegrád Group Expertise and Position in the Samsung Global Value Chain: A Case Study of Samsung Electronics in the V4 Countries," Central European Business Review, Prague University of Economics and Business, vol. 2018(1), pages 14-36.
    6. Daniel Baksa & Istvan Konya, 2019. "Convergence, productivity and debt: the case of Hungary," CERS-IE WORKING PAPERS 1916, Institute of Economics, Centre for Economic and Regional Studies.
    7. Istvan Konya, 2023. "Catching up or getting stuck: convergence in Eastern European economies," Eurasian Economic Review, Springer;Eurasia Business and Economics Society, vol. 13(2), pages 237-258, June.
    8. DUERNECKER Georg & SANCHEZ MARTINEZ Miguel, 2021. "Structural change and productivity growth in the European Union: Past, present and future," JRC Working Papers on Territorial Modelling and Analysis 2021-09, Joint Research Centre.
    9. Elias Giannakis & Theofanis P. Mamuneas, 2022. "Labour productivity and regional labour markets resilience in Europe," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 68(3), pages 691-712, June.
    10. Martin Boďa & Mariana Považanová, 2020. "Productivity patterns in Europe: adaptation of the Malmquist index to measuring group performance and productivity change over time," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 47(4), pages 949-989, November.
    11. Hubert Gabrisch, 2021. "The long-run properties of the Kaldor–Verdoorn law: a bounds test approach to a panel of Central and East European (CEE) countries," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 48(1), pages 101-121, February.

    More about this item

    Keywords

    growth accounting; capital stock; perpetual inventory method; total factor productivity; global financial crisis; Central and Eastern Europe;
    All these keywords.

    JEL classification:

    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence

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