Sources of TFP growth in a framework of convergence-evidence from Greece

The main hypothesis tested in the paper is whether technology is a conduit of productivity growth for a country that falls behind the frontier. Although the current analysis focuses on a country growth narrative, the evidence represents a pair of countries (i.e. Greece and Germany) that admittedly form the periphery and the core of Europe. The first lesson taken from the study is that for more than two decades the speed of productivity adjustment was rather low in Greece underlying a number of unobserved rigidities that exist both at the industry and the institutional level. Even though the speed of technology transfer is low, the adoption of foreign technology remains an important source of productivity growth. Other key findings are that productivity gains from trade exist but their full realization requires a substantial time lag. Additionally, the degree of trade openness improves absorptive capacity confirming the dual role of trade as recently stressed in the productivity literature. R&D activity is another productivity growth contributor but only through higher rates of innovation

Competitiveness productivity and trade: with special reference to Greece.

The current monograph is a collection of essays on the productivity-trade nexus. In a world, where many trade impediments have been removed a country’s ability to succeed in international markets is associated with its ability to improve cost competitiveness. A main objective of the book is to check the empirical validity of the neoclassical theories of trade and specialization. Why countries produce what they produce? Ioannis attempts to provide an assessment to these questions paying special attention to nation-wide factor endowments and productivity performance. Throughout the whole book productivity is a key measure, but after all is productivity just “manna from heaven” or is it something that countries can stimulate with the passage of time? Chapter four analyzes the sources of productivity growth recognizing among others that for a technologically laggard country, imitation of technological advancements, already implemented somewhere else, are rather important engines. Although, the present book emphasizes to Greece, the reader can obtain lessons with respect to many other countries, especially those that comprise of the so- called periphery of Europe

Spillovers and productivity: revisiting the puzzle with EU firm-level data

We revisit the puzzle of FDI spillovers on Total Factor Productivity (TFP) of domestic firms using evidence from six EU countries. Previous literature fails to uncover knowledge spillovers from MNEs operating in the same industry (horizontal) and upstream industries (forward) as it neglects the role of geographical proximity in the case of horizontal spillovers and the role of direct ties between domestic and foreign firms as well as the scope of product differentiation of domestic firm in the case of forward spillovers. The present paper incorporates these new aspects in the identification of horizontal and forward spillovers and shows that economic gains from the presence of MNEs in the domestic economy can be collectively close to 6.1%. Our findings provide one of the missing links highlighted in the meta-analysis of (Havranek and Irsova, 2011) and reinstate the importance of FDI as a source of productivity enhancement for local firms. From a policy perspective, our results reheat the debate about appropriate policies that increase MNEs'embeddedness within the local economy

The determinants of exports in the Greek manufacturing sector

The paper uses price and non-price measures of competitiveness to investigate the determinants of Greek manufacturing export over the period 1988–2005. The conceptual framework bases on the estimation of an export demand function augmented with supply side factors. The findings of the paper indicate that the price elasticity of Greek exports remains higher than the elasticity of any other determinant. This indicates that the main driver of Greek exports has been the ability to reduce prices. Although, exports have a smaller elasticity in product differentiation, technological stock impacts positively on exports of all industrial groups. The results also indicate that in industries with greater ability to differentiate products, the price elasticity of exports becomes smaller. As Greece has experienced substantially losses in competitiveness of traditional low-technology sectors, the above result imply that a successful export paradigm in the future should pay attention to non-price competitiveness. The empirical analysis also suggest that exporting has been a residual activity for Greek manufacturers as increases in production capacity due to demand fluctuations led to exports decreases

Does Greece learn from Germany, technological catch-up and the channels of productivity growth in the Greek manufacturing sector.

The paper examines the determinants of productivity growth in Greece; a country that falls behind the international technological frontier. We set as a benchmark technological leader, the German manufacturing sector, posing the question whether technological transfer from Germany to Greece can generate productivity gains in the latter country. Within this framework, technological transfer can boost productivity growth autonomously but it can also interact with other certain factors such as trade and R&D in improving laggard country’s absorptive capacity. The puzzle of productivity growth in the Greek Manufacturing sector is completed with the consideration of factors related to the general business and institutional environment of the country

Tangible and intangible capital and the pattern of specialization in the EU

This paper investigates the determinants of specialisation in 7 European countries and 4 major industrial sectors in the last 20 years. Next to the impact of traditional factors such as productivity and the endowment of labour and capital, we look at the importance of accounting for capital heterogeneity, by distinguishing between ICT and non-ICT assets, and for intangible capital such as skills and R&D. Our results show that intangible capital and innovation play an important part in increasing the value added shares of the Manufacturing sector while increasing investments in ICT has driven resources away from Manufacturing and towards the Service industry

Costs, knowledge and market structure: understanding the puzzle of international competitiveness with Greek export data

This is an analysis of the sources of international competitiveness with Greek export data for the period 1987–2007. The framework used in the study incorporates factors that do not only represent cost competitiveness but also shed light on the determinants of economic complexity. Economic complexity is the amount of knowledge capabilities embodied in exports that indicates – as a source of comparative advantage – the ability for product differentiation and product variety. The empirical analysis shows that industries benefit substantially from their own R&D activity but, owing to weak economic complexity in the country, there are no cross-industry knowledge spillovers (both at national and international level) that can benefit export activity. Greek exports were found to be sensitive to relative unit labour costs (RULC) but the most important export component of this index is relative labour productivity and not labour cost. Not all institutional arrangements have the same impact on exports, for example high trade union density might harm competitiveness but this factor is uncorrelated with R&D investment. In the view of these findings, Greece’s route to international competitiveness should be primarily by improving its economic complexity, making sure that the country specialises in productive activities that enrich its knowledge capabilities as well as increase the potential of knowledge transfer

Do corporate taxes harm economic performance? Explaining distortions in R&D- and export-intensive UK firms

This paper analyzes the effects of corporate tax liability on firm-level total factor productivity (TFP) as the key driver of economic performance. This is a new dimension in the UK productivity puzzle that has not attracted attention so far. We use 6559 manufacturing firms over 2004–2011 to investigate whether higher levels of corporate tax affect the productivity catch-up process by reducing after-tax earnings that could alternatively be used for productivity-enhancing investment, particularly focusing on R&D- and export-intensive firms. Our key results are summarized as follows: first, higher levels of corporate taxation impact adversely on TFP and this finding is robust to different tax measures and insensitive to endogeneity bias; second, as R&D- and export-intensive firms tend to have relatively higher TFP growth, higher levels of tax liability as a share of earnings before interest and taxes decelerate TFP growth of these firms

Offshoring and Specialisation: Are Industries Moving Abroad?

This paper investigates the impact of off-shoring on specialisation via its effect on national endowments and productivity. We use different definition of off-shoring to properly capture international fragmentation of production, while controlling for countries? stocks of R&D and ICT capital. Using industry data for the US, Japan and Europe we show that while offshoring of materials can benefit a wide range of industries, service and intra-industry offshoring can decrease specialisation in high-tech industry, both within manufacturing and services. This effect can be compensated with increasing R&D investments.