Endogenous Convergence and International Technological Diffusion Channels

Josip Tica · Luka Šikić

South East European Journal of Economics and Business, Vol. 14 No. 2, pp. 34–53

This paper estimates the relative importance of technological-diffusion channels between new EU member states and core EU countries. It combines Phillips and Sul's log-t convergence test with a panel vector autoregression using Eurostat and Penn World Table data. The results identify foreign direct investment and research and development as major drivers of technological change in the full sample, while trade openness and human capital are especially important channels for total factor productivity diffusion in peripheral economies. Productivity-gap reduction is therefore heterogeneous across countries but can be supported through policies that strengthen openness and human capital.

@Article{tica_endogenous_2019,
  author  = {Josip Tica and Luka Šikić},
  title   = {Endogenous Convergence and International Technological Diffusion Channels},
  journal = {South East European Journal of Economics and Business},
  year    = {2019},
  volume  = {14},
  number  = {2},
  pages   = {34--53},
  doi     = {10.2478/jeb-2019-0012},
  url     = {https://content.sciendo.com/view/journals/jeb/14/2/article-p34.xml}
}