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The impact of the Great Recession on TFP convergence among EU countries

Author

Listed:
  • Dolores Añón Higón

    (Department of Economic Structure, University of Valencia, Avda. dels Tarongers s/n, 46022 Valencia (Spain).)

  • Juan A. Mañez

    (Department of Economic Structure, University of Valencia, Avda. dels Tarongers s/n, 46022 Valencia (Spain).)

  • María E. Rochina-Barrachina

    (Department of Economic Structure, University of Valencia, Avda. dels Tarongers s/n, 46022 Valencia (Spain).)

  • A. Sanchis

    (Department of Economic Structure, University of Valencia, Avda. dels Tarongers s/n, 46022 Valencia (Spain).)

  • Juan A. Sanchis

    (Department of Economic Structure, University of Valencia, Avda. dels Tarongers s/n, 46022 Valencia (Spain).)

Abstract

This paper provides evidence on the effect of the Great Recession on productivity convergence among EU economies. We use firm data, aggregated at the country-year level, to analyse the evolution of beta-convergence on total factor productivity (TFP) for 2003-2014. We obtain a positive impact of the recession on TFP (unconditional and conditional) beta-convergence across EU economies. These results support the existence of a catching-up process within the EU during the recent financial crisis. Other macroeconomic and institutional characteristics are important in fostering TFP growth, namely R&D intensity and quality of governance.

Suggested Citation

  • Dolores Añón Higón & Juan A. Mañez & María E. Rochina-Barrachina & A. Sanchis & Juan A. Sanchis, 2017. "The impact of the Great Recession on TFP convergence among EU countries," Working Papers 1702, Department of Applied Economics II, Universidad de Valencia.
  • Handle: RePEc:eec:wpaper:1702
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    References listed on IDEAS

    as
    1. Robert J. Barro, 1991. "Economic Growth in a Cross Section of Countries," The Quarterly Journal of Economics, Oxford University Press, vol. 106(2), pages 407-443.
    2. Schmidt, Klaus M., 1996. "Managerial Incentives and Product Market Competition," CEPR Discussion Papers 1382, C.E.P.R. Discussion Papers.
    3. Robert M. Solow, 1956. "A Contribution to the Theory of Economic Growth," The Quarterly Journal of Economics, Oxford University Press, vol. 70(1), pages 65-94.
    4. Jovanovic, Boyan & MacDonald, Glenn M, 1994. "Competitive Diffusion," Journal of Political Economy, University of Chicago Press, vol. 102(1), pages 24-52, February.
    5. repec:oup:oxecpp:v:69:y:2017:i:4:p:1032-1053. is not listed on IDEAS
    6. Oulton, Nicholas, 1998. "Competition and the Dispersion of Labour Productivity amongst UK Companies," Oxford Economic Papers, Oxford University Press, vol. 50(1), pages 23-38, January.
    7. Klaus M. Schmidt, 1997. "Managerial Incentives and Product Market Competition," Review of Economic Studies, Oxford University Press, vol. 64(2), pages 191-213.
    8. Miller, Stephen M. & Upadhyay, Mukti P., 2002. "Total factor productivity and the convergence hypothesis," Journal of Macroeconomics, Elsevier, vol. 24(2), pages 267-286, June.
    9. Caballero, Ricardo J & Hammour, Mohamad L, 1994. "The Cleansing Effect of Recessions," American Economic Review, American Economic Association, vol. 84(5), pages 1350-1368, December.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    convergence; TFP; Great Recession; European Union countries;

    JEL classification:

    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • O52 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Europe

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