Total Factor Productivity Convergence in German States Since Reunification

Evidence and Explanations

Michael C. Burda, Battista Severgnini

Research output: Contribution to journalJournal articleResearchpeer-review

Abstract

A quarter-century after reunification, labor productivity in the states of eastern Germany continues to lag systematically behind the West. Persistent gaps in total factor productivity (TFP) are the proximate cause; conventional and capital-free measurements confirm a sharp slowdown in TFP growth after 1995. Strikingly, eastern capital intensity, especially in industry, exceeds values in the West, casting doubt on the embodied technology hypothesis. TFP growth is negatively associated with rates of investment expenditures. The stubborn East-West TFP gap is best explained by low concentration of managers, low startup intensity and the distribution of firm size in the East rather than R&D activities.
Original languageEnglish
JournalJournal of Comparative Economics
Volume46
Issue number1
Pages (from-to)192-211
Number of pages20
ISSN0147-5967
DOIs
Publication statusPublished - Mar 2018

Bibliographical note

Published online: 25. April 2017

Keywords

  • Development accounting
  • Productivity
  • Regional convergence
  • German reunification

Cite this

@article{eed6c6f76a6a4042871f1811054b2a3f,
title = "Total Factor Productivity Convergence in German States Since Reunification: Evidence and Explanations",
abstract = "A quarter-century after reunification, labor productivity in the states of eastern Germany continues to lag systematically behind the West. Persistent gaps in total factor productivity (TFP) are the proximate cause; conventional and capital-free measurements confirm a sharp slowdown in TFP growth after 1995. Strikingly, eastern capital intensity, especially in industry, exceeds values in the West, casting doubt on the embodied technology hypothesis. TFP growth is negatively associated with rates of investment expenditures. The stubborn East-West TFP gap is best explained by low concentration of managers, low startup intensity and the distribution of firm size in the East rather than R&D activities.",
keywords = "Development accounting, Productivity, Regional convergence, German reunification, Development accounting, Productivity, Regional convergence, German reunification",
author = "Burda, {Michael C.} and Battista Severgnini",
note = "Published online: 25. April 2017",
year = "2018",
month = "3",
doi = "10.1016/j.jce.2017.04.002",
language = "English",
volume = "46",
pages = "192--211",
journal = "Journal of Comparative Economics",
issn = "0147-5967",
publisher = "Academic Press",
number = "1",

}

Total Factor Productivity Convergence in German States Since Reunification : Evidence and Explanations. / Burda, Michael C.; Severgnini, Battista.

In: Journal of Comparative Economics, Vol. 46, No. 1, 03.2018, p. 192-211.

Research output: Contribution to journalJournal articleResearchpeer-review

TY - JOUR

T1 - Total Factor Productivity Convergence in German States Since Reunification

T2 - Evidence and Explanations

AU - Burda, Michael C.

AU - Severgnini, Battista

N1 - Published online: 25. April 2017

PY - 2018/3

Y1 - 2018/3

N2 - A quarter-century after reunification, labor productivity in the states of eastern Germany continues to lag systematically behind the West. Persistent gaps in total factor productivity (TFP) are the proximate cause; conventional and capital-free measurements confirm a sharp slowdown in TFP growth after 1995. Strikingly, eastern capital intensity, especially in industry, exceeds values in the West, casting doubt on the embodied technology hypothesis. TFP growth is negatively associated with rates of investment expenditures. The stubborn East-West TFP gap is best explained by low concentration of managers, low startup intensity and the distribution of firm size in the East rather than R&D activities.

AB - A quarter-century after reunification, labor productivity in the states of eastern Germany continues to lag systematically behind the West. Persistent gaps in total factor productivity (TFP) are the proximate cause; conventional and capital-free measurements confirm a sharp slowdown in TFP growth after 1995. Strikingly, eastern capital intensity, especially in industry, exceeds values in the West, casting doubt on the embodied technology hypothesis. TFP growth is negatively associated with rates of investment expenditures. The stubborn East-West TFP gap is best explained by low concentration of managers, low startup intensity and the distribution of firm size in the East rather than R&D activities.

KW - Development accounting

KW - Productivity

KW - Regional convergence

KW - German reunification

KW - Development accounting

KW - Productivity

KW - Regional convergence

KW - German reunification

UR - https://sfx-45cbs.hosted.exlibrisgroup.com/45cbs?url_ver=Z39.88-2004&url_ctx_fmt=info:ofi/fmt:kev:mtx:ctx&ctx_enc=info:ofi/enc:UTF-8&ctx_ver=Z39.88-2004&rfr_id=info:sid/sfxit.com:azlist&sfx.ignore_date_threshold=1&rft.object_id=954922647088

U2 - 10.1016/j.jce.2017.04.002

DO - 10.1016/j.jce.2017.04.002

M3 - Journal article

VL - 46

SP - 192

EP - 211

JO - Journal of Comparative Economics

JF - Journal of Comparative Economics

SN - 0147-5967

IS - 1

ER -