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Productivity in the euro area: any evidence of convergence?

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  • David Sondermann

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Abstract

Sizable prevailing real economic disparities among countries in a currency union potentially involve costs for those countries for which the aggregate policy stance is not appropriate. This paper contributes to the literature by testing for productivity convergence among euro area countries. While no convergence can be found on the aggregate level, selected service sectors and manufacturing sub-industries indicate evidence of convergence. In a search for factors influencing productivity, investments in research and development as well as a high skill level of employees are shown to be beneficial, whereas regulations constitute a burden. Copyright Springer-Verlag Berlin Heidelberg 2014

Suggested Citation

  • David Sondermann, 2014. "Productivity in the euro area: any evidence of convergence?," Empirical Economics, Springer, vol. 47(3), pages 999-1027, November.
  • Handle: RePEc:spr:empeco:v:47:y:2014:i:3:p:999-1027
    DOI: 10.1007/s00181-013-0762-x
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    3. Marko Petrovic & Bulent Ozel & Andrea Teglio & Marco Raberto & Silvano Cincotti, 2017. "Eurace Open: An agent-based multi-country model," Working Papers 2017/09, Economics Department, Universitat Jaume I, Castellón (Spain).
    4. Giorgio Calcagnini & Germana Giombini & Giuseppe Travaglini, 2015. "The productivity gap among European countries," Working Papers 1510, University of Urbino Carlo Bo, Department of Economics, Society & Politics - Scientific Committee - L. Stefanini & G. Travaglini, revised 2015.
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    7. Ella Broos & Bernhard Dachs & Martina Dünser & Doris Hanzl-Weiss & Kristof Mertens & Doris Schartinger & Robert Stehrer & Valentijn Vanoeteren, 2016. "EU Wholesale Trade: Analysis of the Sector and Value Chains," wiiw Research Reports 415, The Vienna Institute for International Economic Studies, wiiw.
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    More about this item

    Keywords

    Productivity; Convergence; Panel unit root test ; Manufacturing and service sector; C33; O47; J24; L60; L80;

    JEL classification:

    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • L60 - Industrial Organization - - Industry Studies: Manufacturing - - - General
    • L80 - Industrial Organization - - Industry Studies: Services - - - General

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