Export and total factor productivity of EU new member states

Abstract

The common denominator of the European Union’s (EU) strategic long-run documents is the role of total factor productivity in fostering future growth and competitiveness. Hence, this article analyses the impact of total factor productivity on export competitiveness in EU new member states (NMS). As opposed to the stagnation of the growth of total factor productivity in the advanced economies, EU NMS exhibited stronger growth that was interrupted due to the 2008 economic and financial crisis. After the crisis, the growth continued but it was not as strong as before. The results of the empirical analysis confirm the vital role of total factor productivity for the export competitiveness of the EU NMS. However, the results also point to the fact that the impact of total factor productivity on export competitiveness is not that beneficial in the countries where the value of total factor productivity has not returned to the pre-crisis level.

Keywords

• dynamic panel models
• EU new members
• export competitiveness
• total factor productivity