Productivity Growth across Spanish Regions and Industries: A Production-Frontier Approach

Badunenko O. and Romero-Ávila D. Productivity growth across Spanish regions and industries: a production-frontier approach, Regional Studies. This paper decomposes labour productivity growth into components attributable to technological change, technological catch-up, capital deepening and human capital accumulation. This is done through a production-frontier approach applied to Spanish data disaggregated along regional and sectoral dimensions. It is shown that capital deepening is the primary contributor to productivity growth, closely followed by human capital and technological change; widespread efficiency losses substantially impede productivity growth; productivity convergence is driven by higher efficiency losses exhibited by rich regions; analysis of sectoral data shows marked differences in productivity performance; and aggregate productivity growth is driven by intra-sectoral productivity dynamics rather than by structural change.