16.8. Sector Dynamics, Productivity and Economic Growth in Europe: A Panel Data Analysis

Public examination of a doctoral dissertation in the field of economics
Doctoral candidate: M.Sc. Tahir Mahmood
Time and venue 16.8.2011 at 13.00, C2, Carelia, Joensuu Campus

The doctoral dissertation of M.Sc. Tahir Mahmood, entitled Sector Dynamics, Productivity and Economic Growth in Europe: A Panel Data Analysis, will be examined at the Faculty of Social Sciences and Business Studies. The opponent in the public examination will be Professor Hannu Piekkola of the University of Vaasa, and the custos will be Professor Mika Linden of the University of Eastern Finland.

The doctoral dissertation presents some novel approaches to study the relationship between sector level dynamics, productivity, energy efficiency, and economic growth in Europe. The dissertation consists of an introductory part and four articles, all of which contribute to the topic by applying different panel data models to long run phenomenon of productivity and economic growth.

Productivity is the cornerstone of economic growth. The Europeans are richer than the average person in the Third World primarily because Europe is more productive. Productivity also affects region’s competitive position in the world market. The relationship between productivity and economic growth is today increasingly important for Europe. The average annual real economic growth of EU-15 remained constant, but the labour productivity growth slowed dramatically during the second half of the 1990’s. The decline in the structurally stable labour productivity growth rate exacerbated the slowdown in productivity growth in Europe. However the efficient use of energy resources has increased since the yearly 1990’s.

The increasing global economy and population growth with increasing expectations of wealth are likely to mean a rapid expansion in energy supplies of all types. The study found that in Europe economic growth still has a positive impact on energy efficiency when the trend effects of energy saving and conservation polices are eliminated.

The existence of information and communication technologies (ICT) has potential to enhance the productivity and employment in many sectors of economy. Results in dissertation showed that in Europe labour utilization is positive related to productivity growth mainly in ICT related industries. Therefore, policy makers should generate more jobs in these industries where they can reduce the unemployment not by the cost of the productivity growth.

Typically we can divide an economy into three main sectors: agricultural, industrial, and services sectors. The results obtained show that industry sector is still the “engine” of economy in Europe, and the larger service sector retards the gross domestic product per capita growth rate.
The last article of study compares the regional productivity in Finland during the period of 1975 - 2008. The results are reconcilable with the capital fundamentalist view where the investments in capital stock are also the primary source of long run regional growth.

Photo available for download at http://www.uef.fi/vaitoskuvat

Publishing year: 2011

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