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A technology-based countries-interaction dynamic model for the study of European growth and stability: Were there the conditions for convergence?

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  • Maggi, Bernardo

Abstract

In this research, we study a methodology for evaluating the dynamics of the European countries' growth. Our focus is on the analysis of the convergence conditions implied by the Lisbon strategy and founded on the interaction among technology diffusion, services for firms and production (the so-called “knowledge-based sustainable growth”). We estimate and analyse a differential equations system representing a disequilibrium model where business services assist the production process for the use of technology. To this aim, we develop a specific panel data estimation-procedure for continuous time nonlinear models. We find the offshoring activity, operated by foreign business services, essential for the countries' convergence to a stable growth path. Then, we perform a sensitivity analysis to assess the possible country's specific efforts necessary to gain stability. Further, we provide an evaluation of the convolution integral of our differential system to determine the initial conditions required to pursue a future target value for the endogenous variables.

Suggested Citation

  • Maggi, Bernardo, 2017. "A technology-based countries-interaction dynamic model for the study of European growth and stability: Were there the conditions for convergence?," Technological Forecasting and Social Change, Elsevier, vol. 125(C), pages 275-288.
  • Handle: RePEc:eee:tefoso:v:125:y:2017:i:c:p:275-288
    DOI: 10.1016/j.techfore.2017.07.002
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    References listed on IDEAS

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    Cited by:

    1. Filippo Bontadini & Rinaldo Evangelista & Valentina Meliciani & Maria Savona, 2019. "Integration in Global Value Chains and Employment in Europe," SPRU Working Paper Series 2019-16, SPRU - Science Policy Research Unit, University of Sussex Business School.

    More about this item

    Keywords

    Technology diffusion; Countries' convergence and stability; Future targets; Continuous time estimation; Nonlinear dynamic systems;

    JEL classification:

    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • C53 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Forecasting and Prediction Models; Simulation Methods
    • C62 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Existence and Stability Conditions of Equilibrium
    • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models
    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models

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