Determinants of productivity gap in the European Union : a multilevel perspective / Randolph Luca Bruno (University College London, Rodolfo De-Benedetti Foundation and IZA), Elodie Douarin (University College London), Julia Korosteleva (University College London), Slavo Radosevic (University College London and Higher School of Economics St Petersburg) ; IZA Institute of Labor Economics
VerfasserBruno, Randolph ; Douarin, Elodie ; Korosteleva, Julia ; Radošević, Slavo
KörperschaftForschungsinstitut zur Zukunft der Arbeit
ErschienenBonn, Germany : IZA Institute of Labor Economics, August 2019
Elektronische Ressource
Umfang1 Online-Ressource (58 Seiten) : Diagramme
SerieDiscussion paper ; no. 12542
 Das Dokument ist öffentlich zugänglich im Rahmen des deutschen Urheberrechts.
Determinants of productivity gap in the European Union [1.51 mb]
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The paper explores the determinants of productivity gap within the European Union in four industrial manufacturing sectors (computers, chemicals, basic metals and food) of strong macroeconomic significance and varied 'Research and Development' (R&D) intensity. Our analysis reveals that some of the most important factors determining productivity gap across the EU are related to technology gap variables - R&D intensity and R&D embedded in purchased equipment and machinery - and how they interact. While the signs for both R&D and embedded R&D are as expected and our results emphasise the relevance of technology for closing the productivity gap, this is not the case with the interaction between these two variables. The estimates for the interaction terms are indeed very significant and consistently negative in three out of four sectors. This negative relationship suggests that there is no complementarity between these two modes of technology acquisition - R&D and embedded R&D investments - which are however each separately crucial for catching up. In policy terms, this situation suggests that there is a lack of coordination between R&D policy and technology transfer (FDI, trade and industrial policy). Given that, our results also show a widening productivity gap between the countries of the EU periphery (South and East) and the rest of the sample.