Sources of TFP growth in a framework of convergence-evidence from Greece

Bournakis, Ioannis (2012) Sources of TFP growth in a framework of convergence-evidence from Greece. International Review of Applied Economics, 26 (1). pp. 47-72. ISSN 0269-2171

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Official URL: http://dx.doi.org/10.1080/02692171.2011.557056

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Abstract

The main hypothesis tested in the paper is whether technology is a conduit of productivity growth for a country that falls behind the frontier. Although the current analysis focuses on a country growth narrative, the evidence represents a pair of countries (i.e. Greece and Germany) that admittedly form the periphery and the core of Europe. The first lesson taken from the study is that for more than two decades the speed of productivity adjustment was rather low in Greece underlying a number of unobserved rigidities that exist both at the industry and the institutional level. Even though the speed of technology transfer is low, the adoption of foreign technology remains an important source of productivity growth. Other key findings are that productivity gains from trade exist but their full realization requires a substantial time lag. Additionally, the degree of trade openness improves absorptive capacity confirming the dual role of trade as recently stressed in the productivity literature. R&D activity is another productivity growth contributor but only through higher rates of innovation.

Item Type:Article
Keywords (uncontrolled):Productivity growth; productivity convergence; trade; R&D; Greece; Germany; manufacturing
Research Areas:Business > Economics
ID Code:7071
Permissions granted by publisher:Pre-refereed version as permitted by publisher.
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Deposited On:16 Feb 2011 14:35
Last Modified:05 Sep 2013 05:23

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