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The decomposition of productivity gap between estonia and Korea

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  • The decomposition of productivity gap between estonia and Korea
  • Sepp, Jüri; Varblane, Uku
  • University of Tartu


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Title The decomposition of productivity gap between estonia and Korea
Similar Titles
Material Type Reports
Author(English)

Sepp, Jüri; Varblane, Uku

Publisher

Tartu:University of Tartu

Date 2014
Series Title; No Discourse / 2014-3
Subject Country South Korea(Asia and Pacific)
Estonia(Europe)
Language English
File Type Link
Subject Economy < Economic Administration
Industry and Technology < Others
Social Development < Employment
Holding OrdnungsPolitisches

Abstract

The paper presents a decomposition of productivity gap between South-Korea and Estonia for the year 2006. After presenting stylised facts related to income convergence, we apply shift-share analysis to explain the patterns of structural disparities both at aggregated sectoral level and within the manufacturing sector. We propose an extension to conventional shift-share analysis with using relative productivity indicators. Decomposition shows that the overall productivity gap is mainly related to the manufacturing sector. The results show that at sectoral view, discrepancies in productivity levels of individual sectors (within-effect) play the dominant role in productivity gap formation, whereas we find some support for the structural-bonus hypothesis within the manufacturing sector. In line with the previous studies, relatively high productivity in financial intermediation and real estate sector as a feature of young market economies was confirmed.