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Globalisation and Technological Convergence in the EU

Listed author(s):
  • Camilla Mastromarco

    (Università di Bari)

  • Laura Serlenga

    (University of Bari and IZA)

  • Yongcheol Shin

    (University of York)

We employ a two-step approach in investigating the dynamic transmission chan- nels under which globalization factors foster technical efficiency by combining a dynamic efficiency analysis in the stochastic frontier framework, and a time series approach based on VAR and spectral analysis. Using the dataset of the 18 EU countries over 1970-2004, we find that both import and FDI are significant factors in spreading efficiency externalities and thus accelerating technology catch-up in the EU. In particular, the impacts of the import are more prominent in the short-run while those of FDI play a more important role over the longer-run. Furthermore, the impacts of the import are pro-cyclical only in the short-run whereas those of FDI are pro-cyclical mostly over the medium- to the long-run. This evidence is broadly consistent with the sample observation that the recent slowdown of the EU productivity has been closely related to the corresponding FDI decline espe- cially after 2000. Hence, any protection-oriented policy will be likely to be more detrimental for the EU.

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File URL: http://www.seriesworkingpapers.it/RePEc/bai/series/Economia-Series41.pdf
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Paper provided by Dipartimento di Economia e Finanza - Università degli Studi di Bari "Aldo Moro" in its series SERIES with number 0041.

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Length: 277
Date of creation: Mar 2012
Date of revision: Mar 2012
Handle: RePEc:bai:series:economia-series41
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