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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

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    5. Pilar BeneitoBy & María Engracia Rochina-Barrachina & Amparo Sanchis, 2017. "Competition and innovation with selective exit: an inverted-U shape relationship?," Oxford Economic Papers, Oxford University Press, vol. 69(4), pages 1032-1053.
    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. 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.
    8. 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.
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    Cited by:

    1. Martin Boďa & Mariana Považanová, 2020. "Productivity patterns in Europe: adaptation of the Malmquist index to measuring group performance and productivity change over time," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 47(4), pages 949-989, November.
    2. Lin, Benxi & Du, Ruiying & Dong, Zekuan & Jin, Shaosheng & Liu, Weipin, 2020. "The impact of foreign direct investment on the productivity of the Chinese forest products industry," Forest Policy and Economics, Elsevier, vol. 111(C).

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    More about this item

    Keywords

    convergence; TFP; Great Recession; European Union countries;
    All these keywords.

    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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