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Efficiency and technical progress: sources of convergence in the Spanish regions

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  • Mercedes Gumbau-Albert

Abstract

The paper analyses the contribution of efficiency as a mechanism of labour productivity convergence, taking as the unit of analysis the Spanish regions in the period 1964-1993. Using the stochastic frontier approach, a translogarithmic production function is estimated for the different sectors of the Spanish regional economy, demonstrating on this basis the existence of substantial differences in efficiency between sectors as well as between regions. With regard to convergence, the results obtained indicate that at aggregate level the convergence observed in labour productivity is explained by the faster growth of the capital-labour ratio of the initially poorer regions and the contribution of technical change and the efficiency, hence by the convergence of TFP. However, the information by sectors shows different results. Thus, on the one hand, the importance of the convergence in production per employee is seen in all sectors except agriculture and, on the other it is observed that technical change is a factor of convergence in all sectors but construction, and, qualitatively, the contribution of technical change is greater than the contribution of efficiency. By sectors, technical change contributed significantly to labour productivity convergence in agriculture, but the faster growth of the capital-labour ratio of the rich regions acted as a mechanism of divergence, completely counteracting the technological catching-up effect. It is further concluded that, as well as the contribution of the accumulation of factors, the positive evolution of efficiency in the poorest regions favoured convergence in the construction and industry sectors, whereas technical progress was decisive in industry and the services sectors.

Suggested Citation

  • Mercedes Gumbau-Albert, 2000. "Efficiency and technical progress: sources of convergence in the Spanish regions," Applied Economics, Taylor & Francis Journals, vol. 32(4), pages 467-478.
  • Handle: RePEc:taf:applec:v:32:y:2000:i:4:p:467-478
    DOI: 10.1080/000368400322633
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    References listed on IDEAS

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    1. Meeusen, Wim & van den Broeck, Julien, 1977. "Efficiency Estimation from Cobb-Douglas Production Functions with Composed Error," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 18(2), pages 435-444, June.
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    Cited by:

    1. Heru Margono & Subhash Sharma & Kevin Sylwester & Usama Al-Qalawi, 2009. "Technical efficiency and productivity analysis in Indonesian provincial economies," Applied Economics, Taylor & Francis Journals, vol. 43(6), pages 663-672.
    2. M. M. Salinas-Jimenez, 2003. "Technological change, efficiency gains and capital accumulation in labour productivity growth and convergence: an application to the Spanish regions," Applied Economics, Taylor & Francis Journals, vol. 35(17), pages 1839-1851.
    3. Juan Carlos Chávez-Martín del Campo & Felipe de Jesús Fonseca-Hernández, 2013. "Technical Efficiency, Technological Development, And The Labor Productivity Gap In Mexican Manufacturing," Regional and Sectoral Economic Studies, Euro-American Association of Economic Development, vol. 13(2), pages 43-58.
    4. Juan Carlos Chávez Martín del Campo & Luis Fernando López Ornelas, 2014. "Un enfoque no paramétrico para la descomposición de la productividad del trabajo en la industria manufacturera regional," Ensayos Revista de Economia, Universidad Autonoma de Nuevo Leon, Facultad de Economia, vol. 0(2), pages 33-58, November.
    5. Ramón Mª-Dolores, 2004. "Public capital effects on spanish regions productivity: a non-parametric approach (1965-1998)," Hacienda Pública Española, IEF, vol. 171(4), pages 57-74, december.
    6. Salinas-Jimenez, M. del Mar, 2004. "Public infrastructure and private productivity in the Spanish regions," Journal of Policy Modeling, Elsevier, vol. 26(1), pages 47-64, January.
    7. Sharma, Subhash C. & Sylwester, Kevin & Margono, Heru, 2007. "Decomposition of total factor productivity growth in U.S. states," The Quarterly Review of Economics and Finance, Elsevier, vol. 47(2), pages 215-241, May.
    8. Marco Fioramanti, 2009. "Estimation and Decomposition of Total Factor Productivity Growth in the EU Manufacturing Sector: a Stochastic Frontier Approach," ISAE Working Papers 114, ISTAT - Italian National Institute of Statistics - (Rome, ITALY).
    9. Juan Carlos Chávez & Felipe J. Fonseca, 2012. "Technical and Structural Efficiency in Mexican Manufacturing: A Regional Approach," Working Papers 2012-03, Banco de México.

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