The Role of Human Capital and Managerial Skills in Explaining Productivity Gaps Between East and West

Wolfgang Steffen, Johannes Stephan
2008 Eastern European Economics  
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more » ... von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. The responsibility for discussion papers lies solely with the individual authors. The views expressed herein do not necessarily represent those of the IWH. The papers represent preliminary work and are circulated to encourage discussion with the author. Citation of the discussion papers should account for their provisional character; a revised version may be available directly from the author. Comments and suggestions on the methods and results presented are wellcome. Abstract This paper assess determinants of productivity gaps between firms in the European transition countries and regions and firms in West Germany. The analysis is conducted at the firm level by use of a unique database constructed by field work. The determinants tested in a simple econometric regression model are focussed upon the issue of human capital and modern market-oriented management. The results are novel in as much as a solution was established for the puzzling results in related research with respect to a comparison of formal qualification between East and West. Furthermore, the analysis was able to establish that the kind of human capital and expertise mostly needed in the post-socialist firms are related to the particular requirements of a competitive marketbased economic environment. Finally, the analysis also finds empirical support for the role of capital deepening in productivity catch-up, as well as the case that the gaps in labour productivity are most importantly rooted in a more labour-intense production, which does not give rise to a competitive disadvantage. JEL-classification: L6, M2
doi:10.2753/eee0012-8775460601 fatcat:ejav6tvel5br7hb7vedufoieg4