The Role of the Human Capital and Managerial Skills in Explaining the Productivity Gaps between East and West
AbstractThis paper assess determinants of productivity gaps between firms in the European transition countries and regions and firms in West Germany. The analysis is conducted at the firm level by use of a unique database constructed by field work. The determinants tested in a simple econometric regression model are focussed upon the issue of human capital and modern market-oriented management. The results are novel in as much as a solution was established for the puzzling results in related research with respect to a comparison of formal qualification between East and West. Furthermore, the analysis was able to establish that the kind of human capital and expertise mostly needed in the post-socialist firms are related to the particular requirements of a competitive marketbased economic environment. Finally, the analysis also finds empirical support for the role of capital deepening in productivity catch-up, as well as the case that the gaps in labour productivity are most importantly rooted in a more labour-intense production, which does not give rise to a competitive disadvantage.
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Bibliographic InfoPaper provided by Halle Institute for Economic Research in its series IWH Discussion Papers with number 11.
Date of creation: Nov 2007
Date of revision:
productivity gap; central East Europe; East Germany; firm-level analysis;
Find related papers by JEL classification:
- L6 - Industrial Organization - - Industry Studies: Manufacturing
- M2 - Business Administration and Business Economics; Marketing; Accounting - - Business Economics
This paper has been announced in the following NEP Reports:
- NEP-ALL-2007-11-24 (All new papers)
- NEP-BEC-2007-11-24 (Business Economics)
- NEP-EFF-2007-11-24 (Efficiency & Productivity)
- NEP-HRM-2007-11-24 (Human Capital & Human Resource Management)
- NEP-TRA-2007-11-24 (Transition Economics)
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