Title: Total Factor Productivity Estimates for a Sample of European Regions: A Panel Cointegration Approach
Abstract:This paper looks at the economic performance of the European Regions economies and compute the total factor productivity using a panel cointegration approach. The main idea behind this choice is that,...This paper looks at the economic performance of the European Regions economies and compute the total factor productivity using a panel cointegration approach. The main idea behind this choice is that, rst of all, this approach allows to directly estimate di¤erences across economies in the production function and also to test for the presence of scale economies and market imperfections. Furthermore, the panel cointegration approach takes non-stationarity issues into account. In fact, non-stationarity issues on series have been often overlooked when the panel approach has been used. This paper investigates the stochastic properties of the regional time series using unit root tests and cointegration tests to guard against spurious regression problem and to detect long-run relationships. To ignore the presence of unit roots at best leads to missing important information about the processes generating the data, and at worst leads to nonsensical results. If unit roots are present (and the evidence suggests that they generally are) then appropriate modelling procedures have to be used. The appropriate modelling here is cointegration.Read More
Publication Year: 2007
Publication Date: 2007-01-01
Language: en
Type: article
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Cited By Count: 3
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