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Industrial Specialisation and Productivity Catch-Up in CEECs - Patterns and Prospects -

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  • Johannes Stephan

Abstract

Research into the structural patterns in Central East European economies’ aggregate value added or production can draw upon a large body of literature. However, this research often stops short of assessing what the patterns described tell us in terms of prospects for catching up of each individual accession candidate to European levels of economic development. This distinct lack is mainly rooted in shortcomings of economic theory, which so far is unable to present a coherent theory of integration between unequal partners and catch up development. This paper therefore uses various ad-hoc assumptions (path dependency, hysteresis, learning-curve, product-cycle, etc.) to predict future catch up scenarios for Estonia, Poland, the Czech and Slovak Republics, Hungary, and Slovenia. The focus is on patterns of specialisation in manufacturing industries. A variety of different taxonomies (OECD, WIFO, own classifications) establishing classes of manufacturing industries correspond to the ad-hoc assumptions used and allow careful prediction of individual paths of catching up in industrial productivity levels. The results of this analysis are particularly important for economic policy in accession candidates and at the EU level in terms of targeting structural and cohesion fund policies to their most efficient use. The analysis uses simple empirical methods working with mainly employment and industry-specific productivity data at NACE 3 digit-levels. The paper establishes an empirical model of typical industrial labour productivity growth determined by patterns of specialisation in manufacturing industries and the extent of backwardness by use of past experience both in EU cohesion and EU accession countries. This model is then applied to predict potentials of productivity growth and prospects of productivity catch-up in several distinct scenarios of structural adjustment in EU accession states. The predictions suggest that productivity catch-up will at the very least take mo

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Bibliographic Info

Paper provided by Halle Institute for Economic Research in its series IWH Discussion Papers with number 166.

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Date of creation: Sep 2002
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Handle: RePEc:iwh:dispap:166

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  1. Yvonne Wolfmayr-Schnitzer, . "Economic Integration, Specialisation and the Location of Industries. A Survey of the Theoretical Literature," WIFO Working Papers 120, WIFO.
  2. Michael Peneder, . "Intangible Investment and Human Resources. The New WIFO Taxonomy of Manufacturing Industries," WIFO Working Papers 114, WIFO.
  3. Peter Havlik, 2001. "Patterns of Catching-Up in Candidate Countries' Manufacturing Industry," wiiw Research Reports 279, The Vienna Institute for International Economic Studies, wiiw.
  4. Snower, Dennis J., 1994. "The Low-Skill, Bad-Job Trap," CEPR Discussion Papers 999, C.E.P.R. Discussion Papers.
  5. Tomasz Mickiewicz & Anna Zalewska, 2002. "Deindustrialisation. Lessons from the StructuralOutcomes of Post-Communist Transition," William Davidson Institute Working Papers Series 463, William Davidson Institute at the University of Michigan.
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Cited by:
  1. Yener Kandogan, 2004. "How Much Restructuring did the Transition Countries Experience? Evidence from Quality of their Exports," William Davidson Institute Working Papers Series 2004-637, William Davidson Institute at the University of Michigan.
  2. Dr Johannes Stephan, 2004. "Evolving Structural Patterns in the Enlarging European Division of Labour: Sectoral and Branch Specialisation and the Potentials for Closing the Productivity Gap," Development and Comp Systems 0403003, EconWPA.
  3. Sandrine Levasseur, 2006. "Convergence and FDI in an enlarged EU : what can we learn from the experience of cohesion countries for the CEECS ?," Sciences Po publications 2006-12, Sciences Po.
  4. Sandrine Levasseur, 2006. "Convergence and FDI in an enlarged EU: what can we learn from the experience of cohesion countries for the CEECS?," Documents de Travail de l'OFCE 2006-12, Observatoire Francais des Conjonctures Economiques (OFCE).

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