Convergence at last? Evidence from Transition Countries
AbstractIn this paper, we test the neoclassical growth model and its main prediction of conditional convergence of productivity for a sample of transition countries over the period 1990-2002. We split the sample into three periods: 1990-1994, 1994-1998 and 1998-2002 and confirm the convergence hypothesis only for the last period of transition, while in the early transition, factors specific to the transition process dominated productivity growth. We confirm past findings of importance of the process of liberalization and initial conditions for explaining differences in productivity growth. In the period 1998-2002, transition specific factors play no negative role, while in the period 1994-1998 their role is substantially reduced. These results, however, should not yet be intepreted as a sign of a permenent return to convergence in transition countries as they could be caused by differences in transition cycle.
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Bibliographic InfoPaper provided by LICOS - Centre for Institutions and Economic Performance, KU Leuven in its series LICOS Discussion Papers with number 14404.
Length: 26 pages
Date of creation: 2004
Date of revision:
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convergence; neoclassical growth; regional growth;
Other versions of this item:
- Sašo Polanec, 2004. "Convergence at Last? : Evidence from Transition Countries," Eastern European Economics, M.E. Sharpe, Inc., vol. 42(4), pages 55-80, July.
- O40 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
- O41 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models
- O51 - Economic Development, Technological Change, and Growth - - Economywide Country Studies - - - U.S.; Canada
- O52 - Economic Development, Technological Change, and Growth - - Economywide Country Studies - - - Europe
- O53 - Economic Development, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East
This paper has been announced in the following NEP Reports:
- NEP-ALL-2004-07-04 (All new papers)
- NEP-DEV-2004-07-04 (Development)
- NEP-TRA-2004-07-04 (Transition Economics)
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- Young-Sun Lee & Hyung-Gon Jeong, 2006. "The determinants of economic growth of transition economies: Economic reform versus initial conditions," International Economic Journal, Korean International Economic Association, vol. 20(2), pages 241-252.
- Artelaris, Panagiotis & Arvanitidis, Paschalis & Petrakos, George, 2006. "Theoretical and Methodological Study on Dynamic Growth Regions and Factors Explaining their Growth Performance," Papers DYNREG02, Economic and Social Research Institute (ESRI).
- Spruk, Rok, 2011. "Productivity and income convergence in transition: theory and evidence from Central Europe," MPRA Paper 33389, University Library of Munich, Germany.
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