EMANES Working Paper No 71: REVISITING TFP REGIONAL CONVERGENCE IN THE EU

September 22, 2023
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Using recent data on 155 NUTS (Nomenclature of Territorial Units for Statistics) regions across EU member states, we estimate region-specific production functions to generate regional TFP (Total Factor Productivity) series from 1996 to 2018. The empirical strategy we employ presents a number of desirable properties, as it is based on heterogeneous production functions and accommodates cross-sectional dependence and nonstationarity. We then apply panel unit root tests, some of which allow for structural breaks, to examine whether the European integration and expansion processes were accompanied with a convergence in productivity amongst NUTS regions.