Thomas Schatzer, Matthias Siller, Janette Walde, Gottfried Tappeiner

The Anatomy of Total Factor Productivity Convergence across European Regions

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Keywords: regional convergence, total factor productivity, European regions.

The paper investigates regional total factor productivity (TFP) dynamics in Europe and the contribution of individual regions to overall TFP convergence. Using a recently published approach, we estimate both regional TFP levels and TFP growth rates simultaneously. Hence regional groups with different convergence characteristics are defined, resulting in a TFP convergence classification scheme with which 270 European regions are classified. This procedure provides an in-depth analysis of TFP convergence across European regions by identifying Europe’s technology leaders, catchup regions and problematic regions. It may thus help to define appropriate strategies for regional development.

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