Scandinavian Working Papers in Economics
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Department of Economics, Lund University Working Papers, Department of Economics, Lund University

No 2006:17:
Relative sources of European regional productivity convergence: A bootstrap frontier approach

Kerstin Enflo () and Per Hjertstrand ()

Abstract: We address the issue of Western European regional productivity growth and convergence by means of Data Envelopment Analysis (DEA), decomposing labor productivity into efficiency change, technical change and capital accumulation. The decomposition shows that most regions have fallen behind the production frontier in efficiency and that capital accumulation has had a diverging effect on the labor productivity distribution. We also account for the inherent bias and the stochastic elements in the efficiency estimation using bootstrapping methods. We find that the relative ranking of the bias-corrected efficiency scores remains stable after the bias correction and that the DEA successfully identifies the regions on the production frontier as significantly more efficient than other regions.

Keywords: Bootstrap; DEA; Efficiency; Regional Convergence; (follow links to similar papers)

JEL-Codes: C14; C15; O47; R11; (follow links to similar papers)

22 pages, August 14, 2006

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This paper is published as:
Enflo, Kerstin and Per Hjertstrand, (2009), 'Relative sources of European regional productivity convergence: A bootstrap frontier approach', Regional Studies, Vol. 43, No. 5, pages 643-659

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