Quality of institutions and total factor  productivity in the European Union

Adam P.  Balcerzak; Michał Bernard  Pietrzak

doi:https://doi.org/10.59170/stattrans-2016-028

Quality of institutions and total factor productivity in the European Union

Adam P. Balcerzak Nicolaus Copernicus University, Department of Economics. , Michał Bernard Pietrzak Nicolaus Copernicus University, Department of Econometrics and Statistics. Statistics in Transition new series, vol. 17, 2016, 3, pages: 497-514 Published online: 1 September 2016 https://doi.org/10.59170/stattrans-2016-028

192 Views 11 Downloads

ARTICLE

(English) PDF

ABSTRACT

The key challenge for mid- and long-term policy in the European Union countries is to use the potentials of knowledge-based economy (KBE), which is a condition for maintaining high total factor productivity in Europe. For this reason, the relationship between the quality of an institutional system and total factor productivity in the EU countries has been examined. The quality of the institutional system is defined here from the perspective of incentives that influence the use of the potential of KBE. In order to determine the level of effectiveness of the institutional system in the analysed countries the method for linear ordering of objects was applied based on data from Fraser Institute. The main hypothesis of the article states that the quality of the institutional system in the context of KBE has a significant influence on the level of total factor productivity in the EU. In order to verify this hypothesis, the parameters of the Cobb-Douglas production function were estimated, which allowed the evaluation of TFP for the EU countries. The calculation made in the article based on Eurostat data. In order to identifying the relationship between the quality of the institutional system and the level of TFP a panel model was applied using data from a conducted for years 2000-2010.

KEYWORDS

KBE, TFP, quality of intuitions, European Union, panel model

REFERENCES

AIYAR, S., DALGAARD, C.-J., (2005). Total Factor Productivity Revisited: A Dual Approach to Development Accounting, IMF Staff Papers Vol. 52, No. 1, pp. 82–102.

BALCERZAK, A. P., (2009a). Wpływ działalności regulacyjnej państwa w obszarze kreowania ładu konkurencyjnego na rozwój nowej gospodarki [The impact of the regulatory activities of the state in the sphere of creation of competitive order on the new economy development]. In: Aktywność regulacyjna państwa a potencjał rozwojowy gospodarki. eds. Adam P. Balcerzak and Michał Moszyński, Polskie Towarzystwo Ekonomiczne Oddział w Toruniu, Toruń, pp. 71–106.

BALCERZAK, A. P., (2009b). Efektywność systemu instytucjonalnego a potencjał gospodarki opartej na wiedzy [Effectiveness of the Institutional System Related to the Potential of the Knowledge-Based Economy], Ekonomista, No. 6, pp. 711–739.

BALCERZAK, A. P., (2009c). Structure of Financial Systems and Development of Innovative Enterprises with High Grow Potential, In: M. Piotrowska, L. Kurowski ed., Global Challenges and Politics of the European Union –Consequences for the “New Member States”, Prace Naukowe Uniwersytetu Ekonomicznego we Wrocławiu, nr 59, Wrocław.

BALCERZAK, A. P., (2011). Integracja instytucjonalna w krajach Unii Europejskiej. Propozycja Pomiaru [Institutional integration in the European Union. Suggestion for measurement], Ekonomia i Prawo, Vol. 7, No. 1, pp. 17–34.

BALCERZAK, A .P., (2011). Taksonomiczna analiza jakości kapitału ludzkiego w Unii Europejskiej w latach 2002-2008 [Taxonomic Analysis of the Quality of Human Capital in the European Union in 2002-2008], Prace Naukowe Uniwersytetu Ekonomicznego we Wrocławiu Taksonomia 18 Klasyfikacja I analiza danych – teoria i zastosowania, pp. 456–467.

BALCERZAK, A. P., (2015a). Europe 2020 Strategy and Structural Diversity Between Old and New Member States. Application of zero unitarization method for dynamic analysis in the years 2004–2013, Economics & Sociology, Vol. 8, No. 2, pp. 190–210.

BALCERZAK, A. P., (2015b). Wielowymiarowa analiza efektywności instytucjonalnej w krajach Europy Środkowo-Wschodniej w relacji do standardów OECD [Multivariate Analysis of Institutional Effectiveness in Central European Countries in Relation to OECD Standards], Optimum. Studia Ekonomiczne, Vol. 1(74), pp. 51–63.

BALCERZAK, A. P., PIETRZAK, M. B., (2015a). Wpływ efektywności instytucji na jakość życia w Unii Europejskiej. Badanie panelowe dla lat 2004-2010 [The Impact of the Efficiency of the Institutions on the Quality of Life in the European Union. Panel Data Evidence for the Years 2004-2010], Przegląd Statystyczny, 2015, Vol. 62, No. 1, pp. 71–91.

BALCERZAK, A. P., PIETRZAK, M. B., (2015b). Quality of institutional systems for global knowledge-based economy and convergence process in the European Union, Ekonomia. Rynek, Gospodarka, Społeczeństwo, 2015, No. 42, pp. 9–22.

BALCERZAK, A. P., PIETRZAK, M. B., (2016). Efektywność instytucjonalna krajów Unii Europejskiej [Institutional effectiveness of the European Union countries] , Ekonomista, No. 3, pp. 312–337.

BALCERZAK, A. P., ROGALSKA, E., (2008). Ochrona praw własności intelektualnej w warunkach nowej gospodarki [Protection of copyright in the conditions of the new economy], Ekonomia i Prawo, No.4, pp. 71–87.

CHEN, D. H. C., DAHLMAN, C. J., (2004). Knowledge and Development: A Cross-Section Approach. World Bank Policy Research Working Paper No. 3366.

CHEN, D. H. C., DAHLMAN, C. J., (2004). The Knowledge Economy, the KAM Methodology and World Bank Operations. World Bank Institute Working Paper No. 37256.

CIBOROWSKI, R., (2014). Innovation Process Adjusting in Peripheral Regions. The Case of Podlaskie Voivodship, Equilibrium. Quarterly Journal of Economics and Economic Policy, Vol. 9, No. 2, pp. 57–72.

COE, D. T., HELPMAN, E., (1995). International R&D spillovers, European Economic Review, Vol. 39, No. 5, pp. 859–887.

COE, D. T., HELPMAN, E., HOFFMAISTER, A. W., (2008). International R&D Spillovers and Institutions, IMF Working Paper, WP/08/104, April.

DAŃSKA-BORSIAK, B., LASKOWSKA, I., (2012). The Determinants of Total Factor Productivity in Polish Subregions. Panel Data Analysis, Comparative Economic Research. Central and Eastern Europe, Vol.15, No. 4, pp. 17–29.

DENIS, C., MORROW, K., MC, ROGER, W., VEUGELERS, R., (2005). The Lisbon Strategy and the EU’s structural productivity problem, European Economy, Directorate-General for Economic and Financial Affairs, Economic Papers, N° 221 February.

EUROPEAN COMMISSION, (2010). Europe 2020 A strategy for smart, sustainable and inclusive growth, Communication from the commission, Brussels, 3.3.2010 COM(2010) 2020.

FORGO, B., JEVCAK, A., (2015). Economic Convergence of Central and Eastern European EU Member States over the Last Decade (2004-2014), European Commission, European Economy Discussion Papers, DISCUSSION PAPER 001, JULY 2015.

FRAUMENI, B. M., (2014). Frontiers and Opportunities in Productivity Research, International Productivity Monitor, No. 27, pp. 20–21.

GEHRINGER, A., MARTINEZ-ZARZOSO, I., DANZINGER, F. N.-L., (2014). TFP Estimation and Productivity Drivers in the European Union, Center for European, Governance and Economic Development Research, Discussion Papers, Number 189 – February.

GRUSZEWSKA, E., (2011). Matryca instytucjonalna a innowacyjność [An Institutional Matix and Innovation], Optimum. Studia Ekonomiczne, Vol. 2(50), pp. 103–120.

HELLWIG, Z., (1968). Zastosowanie metody taksonomicznej do typologicznego podziału krajów ze względu na poziom ich rozwoju oraz zasoby i strukturę wykwalifikowanych kadr [Procedure of Evaluating High Level Manpower Data and Typology of Countries by Means of the Taxonomic Method], Przegląd Statystyczny, No. 4, pp. 307–327.

HELLWIG, Z., (1972). Procedure of Evaluating High-Level Manpower Data and Typology of Countries by Means of the Taxonomic Method, In: Z. Gostkowski (ed.), Towards a System of Human Resources Indicators for Less Developed Countries. Papers prepared for a UNESCO Research Project, Ossolineum, The Polish Academy of Sciences, Wrocław, pp. 131–134.

HOBZA, A., MOURRE, G., (2010). Quantifying the potential macroeconomic effects of the Europe 2020 strategy: stylised scenarios, European Economy, Economic Papers 424, September.

MADRAK-GROCHOWSKA, M., (2015). The Knowledge-based Economy as a Stage in the Development of the Economy. Oeconomia Copernicana, Vol. 6, No. 2, pp. 7–21.

PRESCOTT, E. C., (2014). Needed: a Theory of Total Factor Productivity, International Economic Review, Vol. 39, No. 3, pp. 525–551.

SEVERGNINI, B., BURDA, M. C., (2010). TFP Growth in Old and New Europe, Comparative Economic Studies, Vol. 51, No. 4, 2010, pp. 447–466.

TOKARSKI, T., (2008). Oszacowania regionalnych funkcji produkcji [Estimations of Regional Production Functions], Wiadomości Statystyczne, No. 10, pp. 38–53.

TOKARSKI, T., (2010). Przestrzenne zróżnicowanie łącznej produkcyjności czynników produkcji w Polsce [The Regional Diversification of Total Factor Productivity in Poland]. Gospodarka Narodowa. Vol. 3, pp. 24–39.

TOMASZEWICZ, Ł., ŚWIECZEWSKA, I., (2011). Czynniki wzrostu efektywności sektorów polskiej gospodarki [Factors Determining Growth in Efficiency of Different Sectors of Polish Economy], Optimum. Studia Ekonomiczne, 2(50), pp. 36–55.

VAN ARK, B., (2014). Priorities and Directions for Future Productivity Research: The Need for Historical Perspective, International Productivity Monitor, No. 27, pp. 17–19.

WELFE, W., (ed.) (2007). Gospodarka oparta na wiedzy [Knowledge-based Economy], PWE, Warszawa.

WRONOWSKA, G., (2013). Innovations and Sustainable Development Outline of Problems, Equilibrium. Quarterly Journal of Economics and Economic Policy, Vol. 8, No. 1, pp. 71–80