Capital and Labour Productivity Convergence of Manufacturing Industry in the Regions of Greece

Abstract

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in AbstractThis paper explores the process of manufacturing capital and labour productivity convergence across the regions of Greece. The starting point of the analysis is the evolution of current thinking about productivity in spatial analysis. It is suggested that the greater mobility of the factors of production within national borders is to a large extent responsible for the long-standing tendency of geographers to overlook regional productivity dynamics. Some definitional issues in the measurement of productivity precede the estimation of regional capital and labour productivity levels in Greece during the period 1984-1994. Some surprising results are generated. There are clear signs of convergence, but it is the main metropolitan area of the country that attempts to match the labour productivity levels of the other regions, while the latter strive to achieve the capital productivity levels of the capital. The examination of spatial variation in capital intensity makes clear that convergence trends are mainly the outcome of an adjustment process in response to economic crisis. A closer look at the regional incentive legislation reveals an unexpected culprit behind the trends.

Spatial and sectoral productivity convergence between European regions, 1975–2000

“…Most reports of the European Commission focus on regional disparities according to the criteria of per capita GDP. However, as Melachroinos and Spence (1999) note, there are at least two reasons to examine more closely regional disparities based on productivity levels. First, improvements in living standards of any economy are dependent in the long run upon labour productivity increases.…”

The European Regional Growth Process Revisited

“…The model is thus characterized by the presence of multiple steady states, or, put another way, each region potentially converges to a different constant output growth rate (McCombie & Thirlwall, 1994). The second advantage of focusing on regional disparities in productivity levels (instead of differences in per capita levels) is to allow for changes in the living standards of an economy since they are dependent in the long run upon labour productivity increases (Melachroinos & Spence, 1999). In addition, productivity dynamics have often been analysed at the national level (Baumol, 1986;Dollar & Wolff, 1993;Doyle & O'Leary, 1999) but much less at the regional level.…”

A hierarchical analysis of structural change and labour productivity convergence across regions, countries and industries within the EU

“…Therefore, it is important to test labour productivity convergence rather than just output or income convergence. According to Melachroinos and Spence (1999) and Filippetti and Peyrache (2013), labour productivity not only affects living standards but also reduces disparities across regions and countries, especially in the long run. Another important determining factor that affects the labour productivity over-time is structural change, which is defined in the literature as a change in sectoral employment share (for details, see Van Ark (1996)).…”