PurposeThis paper aims to provide empirical evidence on technology convergence within economies of the European Union which is usable for determining the economic growth policy aimed at sustainable long‐run economic growth and the convergence of the development between EU‐member states.Design/methodology/approachTwo different empirical procedures are applied by estimating the technology convergence within the European Union on Eurostat data set. The first is framework developed by Dowrick and Nguyen. The second one is the authors' original contribution to the methodology which is based on the frontier production functions.FindingsSignificant technology convergence is recognized between 15 old EU‐member states and eight new‐member states. However, the technology convergence has obviously not accelerated the convergence of gross domestic product per labor unit between exposed groups of economies. Technical inefficiency is recognized as the main source that impedes a spill‐over effect of technology convergence. Following this it is established that in the future more effort should be directed into elimination of technical inefficiency.Originality/valuePresented findings can be used to arrange the economic policy measures aimed at accelerating technology development in case of European Union.
This article analyses the impact of sectoral reallocation of labour on the growth of total factor productivity in the Slovenian economy. Using the estimation of the standardised and structural components of labour productivity growth, and the stochastic frontier growth accounting framework, we can establish three main conclusions. First, failure to reallocate labour from less toward more productive industries is significantly impeding the growth of total factor productivity in Slovenia and hence reducing its foreign competitiveness. Second, classical economic policy measures aimed at accelerating growth of total factor productivity, such as increased competition among firms on the basis of trade liberalisation and the inflow of foreign direct investment, are not appropriate. Third, controversially, there is no short-run policy measure that can be undertaken with the aim of reallocating labour among industries, since it depends upon the nature of the individual's acquired level of education. What remains is education policy that will stimulate permanent education and provide workers with the skills that enable them to respond rapidly to the changes in the national production structure throughout the period of the individual's active employment.
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