World economy and international economic relations

Productivity development and convergence across the EU Member States

Economic Annals-XXI

Economic Annals-ХХI: Volume 162, Issue 11-12, Pages: 13-17

Citation information:
Carnicky, S., Megyesiova, S., Conkova, M., & Zavadsky, C. (2016). Productivity development and convergence across the EU Member States. Economic Annals-XXI, 162(11-12), 13-17. doi: https://doi.org/10.21003/ea.V162-03

View Full-TextDownload PDF

Stefan Carnicky
PhD (Economics),
Professor,
University of Economics in Bratislava
13, Tajovskeho Str., Kosice, 04130, Slovak Republic
stefan.carnicky@euke.sk
ORCID ID: http://orcid.org/0000-0003-4797-442X

Silvia Megyesiova
PhD (Economics),
Associate professor,
University of Economics in Bratislava
13, Tajovskeho Str., Kosice, 04130, Slovak Republic
silvia.megyesiova@euke.sk
ORCID ID: http://orcid.org/0000-0002-6815-5629

Monika Conkova
PhD (Economics),
Assistant professor,
University of Economics in Bratislava
13, Tajovskeho Str., Kosice, 04130, Slovak Republic
monika.conkova@euke.sk
ORCID ID: http://orcid.org/0000-0002-8041-6588

Cyril Zavadsky
PhD (Economics),
Assistant professor,
University of Economics in Bratislava
13, Tajovskeho Str., Kosice, 04130, Slovak Republic
cyril.zavadsky@euke.sk
ORCID ID: http://orcid.org/0000-0002-8053-6483

Productivity development and convergence across the EU Member States

Abstract. The EU Member States have different levels of development. The state of development can be rated in various ways, using some economic or human development indictors. Enhancement of economic well-being of the EU countries belongs to the main goals of the 28 EU Member States. The improvement of well-being expects the convergence of socio-economic indicators. Labour productivity (LP) belongs to indicators of economic competitiveness reflecting the standard of living. Almost in all of the initial EU countries LP is higher than LP in the «new» EU members. In 2000 LP in purchasing power standard (PPS) was as low as 9,314 in Romania, but due to a strong increase by 256% LP reached PPS 33,188 in 2015. The lowest increase in LP in the same time span was achieved in Italy, where LP increased by only 19.4% from PPS 51,287 to PPS 61,244. Between the Visegrad Four countries Slovakia´s LP grew by a highest rate of 107.8% and so the proportion of LP in Slovakia compared to EU-28 average ­(EU-28=100) increased from 53.7% in 2000 to 83.6% in 2015. Not only in Slovakia, but a strong jump of LP in PPS was achieved also in Poland (by 95.3%), in Hungary (by 72.5%), and in Czech Republic (by 67.6%). The convergence process of LP was typical for the period till the beginning of the economic crisis. From 2000 until 2008 the convergence of LP between the EU members was achieved in Beta- and Sigma-convergence. The coefficient of variation of LP decreased from 36.4% in 2000 to 27.4% in 2008. The economic crisis activated the divergence of LP. In 2015 the coefficient of variation increased to 31.7%. We expect that the convergence process of LP will successfully continue in periods of recovery and expansion of the EU economies.

Keywords: Productivity; Labour Productivity; Production; GDP; Gross Value Added; Variability; Employment; Slovakia; Visegrad Four

JEL Classification: E23; E24; J21

Acknowledgment. The paper presents partial results of the research project VEGA No. 1/0562/14 «The impact of Business Intelligence tools on corporate performance».

DOI: https://doi.org/10.21003/ea.V162-03

References

  1. Baldwin, J., Gu, W., Macdonald, R., & Yan, B. (2014). Productivity: What Is It? How Is It Measured? What Has Canada’s Performance Been Over the Period 1961 to 2012? Ottawa: Statistics Canada.
    Retrieved from http://www.statcan.gc.ca/pub/15-206-x/15-206-x2014038-eng.htm
  2. Censolo, R., & Colombo, C. (2016). The impact of the crisis on fiscal convergence in the EU: The early signs. Journal of European Integration, 38(6), 703-717.
    doi: https://doi.org/10.1080/07036337.2016.1177044
  3. Ceylan, R., & Abiyev, V. (2016). An examination of convergence hypothesis for EU-15 countries. International Review of Economics & Finance, 45, 96-105.
    doi: https://doi.org/10.1016/j.iref.2016.05.007
  4. Chapsa, X., & Katrakilidis, C. (2014). Assessing economic convergence in the EU: Is there a perspective for the «cohesion countries»? Applied Economics, 46(33), 4025-4040.
    doi: https://doi.org/10.1080/00036846.2014.946185
  5. European Commision (2016). Irish GDP revision.
    Retrieved from http://ec.europa.eu/eurostat/documents/24987/6390465/Irish_GDP_communication.pdf
  6. Eurostat (2017). Official web-site.
    Retrieved from http://ec.europa.eu/eurostat/data/database
  7. Freeman, R. (2008). Labour Productivity Indicators.
    Retrieved from http://www.oecd.org/employment/labour-stats/41354425.pdf
  8. Grzebyk, M., & Stec, M. (2014). Social and Economic Development of Ukraine in Comparison to European Union Member States: statistical evaluation. Economic Annals-XXI, 5-6, 17-21.
    Retrieved from https://ea21journal.world/index.php/ea-v141-04/
  9. Herman, E. (2016). Productive Employment in Romania: A Major Challenge to the Integration into the European Union. Amfiteatru Economic, 18(42), 335-350.
    Retrieved from https://www.researchgate.net/publication/302992492_
    Productive_Employment_in_Romania_A_Major_Challenge_to_the_Integration_into_the_European_Union
  10. Kuusk, A., Staehr, K., & Varblane, U. (2016). Sectoral change and labour productivity growth during boom, bust and recovery in Central and Eastern Europe. Economic Change and Restructuring. Online First Articles. 1-23.
    doi: https://doi.org/10.1007/s10644-016-9180-3
  11. Martino, R. (2015). Convergence and growth. Labour productivity dynamics in the European Union. Journal of Macroeconomics, 46, 186-200.
    doi: https://doi.org/10.1016/j.jmacro.2015.09.005
  12. Megyesiova, S., & Lieskovska, V. (2015). Decomposition of GDP Growth and Convergence of Selected Indicators. Finance and the Performance of Firms in Science, Education, and Practice: proceedings of the 7th international scientific conference, April 23-24, 2015. (pp. 931-937). Zlin, Czech Republic: Tomas Bata University in Zlin, Faculty of Management and Economics, 2015.
  13. OECD (2001). Measuring Productivity – OECD Manual. Measurement of Aggregate and Industry-level Productivity Growth. Paris: OECD Publishing.
    Retrieved from https://www.oecd.org/std/productivity-stats/2352458.pdf
  14. Pashkevych, M., & Papizh, Y. (2014). Regional Convergence and Innovative Management. Economic Annals-XXI, 3-4, 74-77.
    Retrieved from https://ea21journal.world/index.php/ea-v139-19/
  15. Peiro-Palomino, J. (2016). European regional convergence revisited: the role of intangible assets. The Annals of Regional Science, 57(1), 165-194.
    doi: https://doi.org/10.1007/s00168-016-0767-4
  16. Stoevsky, G. (2014). Dependencies between labour productivity, export and fdi in the new EU member countries. Ikonomicheski Izsledvania, 23(4), 15-42.
    Retrieved from http://econpapers.repec.org/article/baseconst/y_3a2014_3ai_3a4_3ap_3a15-42.htm

Received 1.11.2016

View Full-TextDownload PDF
In, , , , , , , , , ,

More Papers