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This study examines the performance and productivity convergence of profit-oriented microfinanceinstitutions in Latin America and the Caribbean from 2007 to 2018. Importantly, the study assesses twoaspects of performance: financial performance and financial inclusion through lending to microenterprises.During the period studied, the productivity change in both aspects declined. Furthermore, productivityconvergence reveals that the productivity change of the previously lagging institutions increases fasterthan previously leading institutions in both aspects (catching up). Nevertheless, in terms of financialperformance, dispersion in productivity change is growing. In conclusion, the study confirms thatmicrofinance institutions with an emphasis on profit must operate at an optimal scale to achieve progressin productivity changes in terms of financial inclusion. Moreover, to achieve progress in productivitychange and productivity convergence in the financial performance aspect, profit-oriented microfinanceinstitutions have to focus on technological improvement and innovations, getting the maximum output byutilizing the inputs by using efficient managerial practices, and operating on an optimal scale.

New Zealand has experienced poor productivity performance over the last two decades. Factors often cited as reasons behind this are the small size of the domestic market and distance to international partners and markets. While the distance reason is one that is fairly insurmountable, there are a number of other small advanced economies that also face similar domestic market constraints. This study compares the relative performance of New Zealand's firms to those economies using novel cross-country microdata from CompNet. We present stylised facts for New Zealand relative to the economies of Belgium, Denmark, Finland, Netherlands and Sweden based on average productivity levels, as well as benchmarking laggard, median and frontier firms. This research also employs an analytical framework of technology diffusion to evaluate the extent of productivity convergence, and the impact of the productivity frontier on non-frontier firm performance. Additionally, both labour and capital resource allocation are compared between New Zealand and the other small advanced economies. Results show that New Zealand's firms have comparatively low productivity levels and that its frontier firms are not benefiting from the diffusion of best technologies outside the nation. Furthermore, there is evidence of labour misallocation in New Zealand based on less labour-productive firms having disproportionally larger employment shares than their more productive counterparts. Counter-factual analysis illustrates that improving both technology diffusion from abroad toward New Zealand's frontier firms, and labour allocation across firms within New Zealand will see sizable productivity gains in New Zealand.

Despite generally solid growth in East Asia since the 1980s, there remain large differences in productivity across the economies. Focusing on convergence in industrial productivities, this paper examines their convergence processes. We decompose industrial productivity growth into intra-industry productivity growth and inter-industry reallocation of resources. We find that, as contrasting to ANIEs (Hong Kong, Korea, Singapore and Taiwan), ASEAN4 (Indonesia, Malaysia, Philippines and Thailand) have not shown persistent industrial productivity convergence nor persistent structural transformation toward industrialization, while China’s productivity growth shows some magnified version of those of Korea and Taiwan. In other words, we argue that ANIEs and ASEAN4 make two distinct groups in terms of aggregate and sectoral productivity convergence.

Total Factor Productivity (TFP) is the synthetic measure of effectiveness of the production process in a country due to technological progress. The aim of the article is to examine (with the use of econometric methods) the level and dynamics of TFP in the particular European Union member states in the period 2000–2014 and to point out the direction of TFP changes in the analysed group of countries. In the article one makes the attempt to answer the question whether the productivity convergence, influencing relevantly the real convergence process in the EU, is also possible. Łączna produktywność czynników produkcji (Total Factor Productivity – TFP) jest syntetycznym miernikiem efektywności procesu produkcyjnego w kraju, wynikającej z postępu technicznego. Celem artykułu jest oszacowanie (za pomocą metod ekonometrycznych) poziomu i dynamiki TFP w poszczególnych krajach Unii Europejskiej w latach 2000–2014 oraz wskazanie kierunku zmian jej zróżnicowania w analizowanej grupie krajów. W artykule podejmuje się także próbę odpowiedzi na pytanie, czy w krajach Unii Europejskiej możliwa jest konwergencja produktywności, mająca istotny wpływ na ich proces konwergencji realnej. University of Technology and Humanities in Radom Uniwersytet Technologiczno-Humanistyczny w Radomiu

The countries of the Latin America and Caribbean region (LAC), like other emerging economies, have benefited from a decade of remarkable growth and some income per capita convergence towards the United States and other industrialized countries. However, even nearly ten years of solid growth in the first decade of the 21st century could not guarantee that LAC would move on to a sustained long-term income convergence path. In fact, despite this recent progress, LAC still faces a significant per capita income gap with the developed world. The papers in this volume contribute to the ongoing debate on the reasons for this persistent income gap and the potential drivers of convergence, and propose some broad avenues for reform. This volume presents new macro-, sectoral-, and micro-level evidence that: (i) differences in total factor productivity (TFP), or efficiency in using the production factors, such as physical and human capital, explain a large part of LAC's persistent income gap; and (ii) resource misallocation is the main factor behind LAC's large efficiency gap. At the same time, the findings of this volume indicate there is significant room for further economic growth gains from technology adoption and innovation more broadly. In fact, the quality of the available technology in LAC is low, and there is very little innovation. Although firms can use innovation to reach productivity at the global productivity frontier, weak institutions reduce incentives to innovate. This volume also proposes that the main priorities for improving resource allocation and the incentives to innovate include: (i) enhancing market competition in key network industries (transport, financial, telecommunications, logistics, communication and distribution services); (ii) increasing labor market flexibility (including skill-mismatches and social barriers); (iii) removing informational frictions (including complex tax regimes and credit rationing); (iv) strengthening property rights; and (v) improving the rule of law.

Summary Despite rapid economic integration and massive help from the Federal Government East German productivity catching up faded out in the nineties. This paper presents panel-data estimates of the productivity adjustment based on a production function framework and a stylized adjustment model of the economy. The central empirical result is a decomposition of the sources of productivity growth. The estimates reveal that a large part of productivity growth in the early nineties is related to factors that were specific for that period. The fading out since the mid-nineties is attributed to the development of total factor productivity.

This paper examines whether labor productivity converged across Peru’s regions (“departments”) during 2002-12. Given the large differences in labor productivity across the regions of Peru, such convergence has the potential to raise aggregate productivity and incomes, and also reduce regional inequalities. The paper finds that labor productivity in the secondary sector (especially manufacturing) and the mining sector has converged across Peruvian departments. The paper does not find robust evidence for labor productivity convergence in agriculture and services. These patterns are consistent with recent cross-country evidence and with the hypothesis that productivity convergence is more likely in sectors with greater scope for market integration, because of the effects of competition and knowledge flows. The convergence in labor productivity within manufacturing and mining has been sufficient to lead to convergence in aggregate labor productivity across departments. But because services and agriculture continue to employ the majority of workers in Peru, aggregate convergence is slower than that within manufacturing. The paper also finds that poverty rates are not converging across departments. The limited impact of labor productivity convergence on poverty could be tied to the facts that not all sectors are experiencing productivity convergence, poorer people are employed in sectors where convergence has been slower (such as agriculture), and there is very little labor reallocation toward converging sectors (such as manufacturing).

This report takes an in-depth look at the development of jobs in the Kyrgyz Republic over the past decade to understand why the country has not realized better job outcomes. Drawing on evidence at the macro, household, and firm level, it examines key shortcomings in the current migration-led, remittance-driven development model that have weakened the country’s ability to create sufficient and high-quality employment opportunities and are likely to result in deteriorating job outcomes in the future. The report argues that several broad transformations will be needed to develop engines of growth in the Kyrgyz Republic outside remittances and shift to a better jobs path. The distortions and obstacles that currently prevent the expansion of private sector employment need to be unraveled; macroeconomic, regulatory, and logistical impediments to greater, more diversified export orientation need to be strategically addressed; the compensation of public employees must be reformed to reduce the level of corruption that discourages business growth; and the migration phenomenon, which will be a part of the employment mosaic for at least another decade, must be made to contribute to domestic employment creation and the country’s development.

The article aims to empirically validate three questions. Have productivity differences in European manufacturing been increasing or diminishing and what has been the situation in Central and Eastern Europe countries? Are productivity differences homogenous over time and across manufacturing industries? What is the role of the internal structure of manufacturing for convergence? For this purpose, an analysis of σ- and β-convergence in 11 manufacturing industries has been conducted, making use of shift-share decomposition techniques. A complex view of catching-up is demonstrated with heterogeneity over time and across industries. Convergence occurred in Western Europe until approximately 1990, but since then disparities have been increasing and CEE countries were the only ones catching up. Convergence took place predominantly in medium-tech industries, while both low-tech and high-tech industries experienced divergence. Structural differences account for a minor share of the productivity disparities; however, changes in employment structures and productivity together led to the formation of two clubs of countries: low-tech, low productivity and high-tech, high productivity countries.

The study investigates the convergence of labour productivity in 204 NUTS2 regions of the EU-15 between 1995 and 2006. The main objective of our work was to assess whether and to what extent European Union (EU) policies (Regional Policy and Common Agricultural Policy) have been effective in promoting economic growth and fostering the process of convergence of EU regions. These policies can have an asymmetric spatial impact, even if some concrete steps have been taken to avoid an excessive concentration of costs or benefits. To verify the effects of EU policies we compare different scenarios: with/without EU policies. Under a methodological profile, we adopt the Solovian model proposed by Mankiw et al. (1992). For the estimates we used an econometric approach based on spatial filters with characteristics similar to Geographically Weighted Regression (GWR) in order to obtain consistent estimates of both the convergence parameters β and the impact of the conditioning variables, policy measures in particular. Our technique allows the estimation of different convergence rates for each region and management of both the presence of spatial spillovers and structural differences in the regional economies. The results indicate that global convergence rates are comparable to those obtained in some other studies, while local coefficients help to interpret the regional growth paths in a more realistic way. Finally, we utilise a quasi-experimental design, the Regression Discontinuity, for comparing the results of policy interventions, in terms of regional β-convergence rates, with a ‘counterfactual’ scenario.

The study investigates the convergence of labour productivity in 204 NUTS2 regions of the EU-15 between 1995 and 2006. The main objective of our work was to assess whether and to what extent European Union (EU) policies (Regional Policy and Common Agricultural Policy) have been effective in promoting economic growth and fostering the process of convergence of EU regions. These policies can have an asymmetric spatial impact, even if some concrete steps have been taken to avoid an excessive concentration of costs or benefits. To verify the effects of EU policies we compare different scenarios: with/without EU policies. Under a methodological profile, we adopt the Solovian model proposed by Mankiw et al. (1992). For the estimates we used an econometric approach based on spatial filters with characteristics similar to Geographically Weighted Regression (GWR) in order to obtain consistent estimates of both the convergence parameters β and the impact of the conditioning variables, policy measures in particular. Our technique allows the estimation of different convergence rates for each region and management of both the presence of spatial spillovers and structural differences in the regional economies. The results indicate that global convergence rates are comparable to those obtained in some other studies, while local coefficients help to interpret the regional growth paths in a more realistic way. Finally, we utilise a quasi-experimental design, the Regression Discontinuity, for comparing the results of policy interventions, in terms of regional β-convergence rates, with a ‘counterfactual’ scenario.

This paper presents empirical evidence of the effect of FDI inflows on productivity convergence in central and eastern Europe, using industry-level data. Four conclusions stand out. First, there is a strong convergence effect in productivity, both at the country and at the industry level. Second, FDI inflow plays an important role in accounting for productivity growth. Third, the impact of FDI on productivity critically depends on the absorptive capacity of recipient countries and industries. Fourth, there is important heterogeneity across countries, industries and time with respect to some of the main findings.

This paper introduces a model for forecasting changes in employment levels and structures by sectors, occupational categories and educational attainment levels which is then applied to the new EU member states (NMS) and Bulgaria and Romania. The model is based on the following ideas As these countries face lower productivity levels as compared to the EU-15, the scope for technical change and catching up is quite large. Thus, if these countries converge to the EU-15 productivity levels at given trajectories, real income levels are also changing, which implies changes in demand and thus output structures by Engel curve effects. The latter are modelled as convergence to the EU-15 output structures. These factors, i.e. changes in productivity levels and output structures, in turn imply changes in the level and structure of employment. For making the forecasts we estimated the speed of convergence in productivity levels by sectors and the sectoral output shares econometrically from a larger country sample (including mainly EU countries). From these estimates and the initial levels, forecasts of convergence patterns for productivity levels and output shares are calculated, which are presented for the period up to 2012. A further decomposition with respect to occupational categories and educational attainment levels allows to forecast labour demand with respect to these groups.

Several authors have asked why the differences in output per worker between countries are so large and hypothesized that differences in social infrastructure provide an answer. However, differences in output per worker also vary considerably when comparing spatial units at lower levels of resolution, without substantial variation in the social infrastructure. The purpose of this paper is to discuss possible reasons for regional differences based on data for the Scandinavian Peninsula at a spatial resolution almost equivalent to the European NUTS3. Since Norway and Sweden are considered to be particularly egalitarian and homogeneous societies, differences in broad measures of social infrastructure can hardly be invoked as substantially important determinants of productive performance. Instead, we investigate the role played by industrial structure. We find strong productivity convergence between Norwegian regions and weak divergence between Swedish ones. For Norway, there is convergence in primary production, manufacturing and services. For Sweden, there is divergence, except in the primary sector. The effect of the industry structure on the spatial distribution of productivity appears to be small in magnitude, but is qualitatively important at least for one time period. The data cover 5-year intervals from 1980 to 2000 for Norway and from 1985 to 2000 for Sweden.

This paper investigates cross-country productivity convergence for the period 1960-1999. The testing strategy is based on a combination of tests and estimation methods. We use the de…nitions of time-series convergence by Bernard and Durlauf (1995), applying multivariate unit root tests, such as those proposed by Sarno and Taylor (1998). Moreover, in this same multivariate context, the Flôres et al. (1996) and Breuer et al. (1999) tests identify the countries that converge. Based on a sample of the 4 Mercosur countries plus associates (Chile and Bolivia) and Peru our results show evidence of convergence among the four Mercosur countries, both using Argentina and Brazil as benchmark countries. Moreover, some weaker evidence of convergence is also found with Bolivia. In contrast, convergence is rejected with Chile and Peru.