TY - UNPB
T1 - TFP Convergence in German States Since Reunification
T2 - Evidence and Explanations
AU - Burda, Michael C.
AU - Severgnini, Battista
PY - 2015
Y1 - 2015
N2 - A quarter-century after reunification, labor productivity in eastern Germany continues to lag systematically behind the West. Denison-Hall-Jones point-in-time estimates point to large gaps in total factor productivity as the proximate cause, and auxiliary measurements which do not rely on capital stock data confirm a slowdown in TFP growth after 2000. Strikingly, capital intensity in eastern Germany, especially in industry, has overshot values in the West, casting doubt on the embodied technology hypothesis. Indeed, TFP growth is negatively associated with rates of expenditures on both total investment and plant and equipment. The best candidates for explaining the stubborn East-West TFP gap are the low concentration of managers in the East and the insufficient R&D expenditure, rather than the concentration of firm headquarters and R&D personnel.
AB - A quarter-century after reunification, labor productivity in eastern Germany continues to lag systematically behind the West. Denison-Hall-Jones point-in-time estimates point to large gaps in total factor productivity as the proximate cause, and auxiliary measurements which do not rely on capital stock data confirm a slowdown in TFP growth after 2000. Strikingly, capital intensity in eastern Germany, especially in industry, has overshot values in the West, casting doubt on the embodied technology hypothesis. Indeed, TFP growth is negatively associated with rates of expenditures on both total investment and plant and equipment. The best candidates for explaining the stubborn East-West TFP gap are the low concentration of managers in the East and the insufficient R&D expenditure, rather than the concentration of firm headquarters and R&D personnel.
KW - Productivity
KW - Regional convergence
KW - German reunification
KW - Productivity
KW - Regional convergence
KW - German reunification
M3 - Working paper
T3 - SFB 649 Discussion Paper
BT - TFP Convergence in German States Since Reunification
PB - Humboldt State University
CY - Berlin
ER -