Labour Productivity and Technology Gap in European Regions: A Non-Parametric Approach

Posted: 15 Apr 2012  

Andrea Filippetti

Italian National Research Council (CNR-ISSIRFA); London School of Economics & Political Science (LSE); University of London - Birkbeck College

Antonio Peyrache

University of Queensland - School of Economics

Date Written: April 14, 2012

Abstract

The endogenous approach to regional development policy has become central over the last decade. By employing the conditional frontier approach, this paper investigates the relative contribution to labour productivity growth of: (1) capital accumulation, (2) exogenous technical change and efficiency, and (3) endogenous technological capabilities – i.e. innovation capability and human capital. We find overall convergence in labour productivity growth driven by capital accumulation and exogenous technical change, in 211 European regions in 18 countries over the period 1995-2007. Differences in terms of relative contribution arise concerning advanced regions vis-à-vis backward regions. As for the latter, productivity growth is mainly driven by capital accumulation, while the lack of convergence in terms of endogenous technological capabilities casts some doubts on the sustainability of the convergence process and suggests some implications for the European Cohesion policy.

Keywords: labour productivity growth, technology gap, data envelopment analysis, EU Cohesion policy

JEL Classification: O3, R11, C14

Suggested Citation

Filippetti, Andrea and Peyrache, Antonio, Labour Productivity and Technology Gap in European Regions: A Non-Parametric Approach (April 14, 2012). Available at SSRN: https://ssrn.com/abstract=2039769

Andrea Filippetti (Contact Author)

Italian National Research Council (CNR-ISSIRFA) ( email )

Via dei Taurini, 19
00185 Rome
Italy

London School of Economics & Political Science (LSE) ( email )

Houghton Street
London, WC2A 2AE
United Kingdom

University of London - Birkbeck College ( email )

Malet Street
London, WC1E 7HX
United Kingdom

Antonio Peyrache

University of Queensland - School of Economics ( email )

Brisbane, QLD 4072
Australia

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