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Relative Sources of European Regional Productivity Convergence: A Bootstrap Frontier Approach

[journal article]

Enflo, Kerstin; Hjertstrand, Per

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Abstract This paper addresses the issue of Western European regional productivity growth and convergence by means of Data Envelopment Analysis (DEA), decomposing labour productivity into efficiency change, technical change and capital accumulation. The decomposition shows that most regions have fallen behind the production frontier in efficiency and that capital accumulation has had a diverging effect on the labour productivity distribution. Using bootstrapping methods, the paper also accounts for the inherent bias and the stochastic elements in the efficiency estimation. It is found that the relative ranking of the efficiency scores remains stable after the bias-correction, even after controlling for spatially correlated measurement errors, and that the DEA successfully identifies the regions on the production frontier as significantly more efficient than other regions.
Classification Area Development Planning, Regional Research; Economics
Document language English
Publication Year 2009
Page/Pages p. 643-659
Journal Regional Studies, 43 (2009) 5
Status Postprint; peer reviewed
Licence PEER Licence Agreement (applicable only to documents from PEER project)