<abstract xmlns="http://www.w3.org/1999/xhtml"><p>European monetary integration must be understood as an additional step towards strengthening the close ties that have been fostered after the Second World War. The aim of this research is to determine the effect of adopting the euro in terms of productivity growth, measured as the total factor productivity (TPF) variation. We used a panel data analysis with two-way fixed effects to estimate the effects of Euro adoption on the productivity growth. Two panels from 1996 to 2016 were used –one comprised 28 countries of EU members; the other only included 13 countries which joined the EU since 2004. Our findings suggest that the productivity growth of the countries that joined in 2004 and adopted the euro was higher compared to those that maintained their own currency. In addition, we find that FDI was the main channel through which the adoption of the euro influenced productivity growth.</p></abstract>

European monetary integration must be understood as an additional step towards strengthening the close ties that have been fostered after the Second World War. The aim of this research is to determine the effect of adopting the euro in terms of productivity growth, measured as the total factor productivity (TPF) variation. We used a panel data analysis with two-way fixed effects to estimate the effects of Euro adoption on the productivity growth. Two panels from 1996 to 2016 were used –one comprised 28 countries of EU members; the other only included 13 countries which joined the EU since 2004. Our findings suggest that the productivity growth of the countries that joined in 2004 and adopted the euro was higher compared to those that maintained their own currency. In addition, we find that FDI was the main channel through which the adoption of the euro influenced productivity growth.

Can Monetary Integration Improve Productivity? Empirical Evidence of Eurozone

Faculty of Economics & Business Universidad de las Américas

South East European Journal of Economics and Business

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.

{"article-title":"Can Monetary Integration Improve Productivity? Empirical Evidence of Eurozone"}

European monetary integration must be understood as an additional step towards strengthening the close ties that have been fostered after the Second World War....

Can Monetary Integration Improve Productivity? Empirical Evidence of Eurozone

Published Online: Dec 31, 2020

Page range: 57 - 69

DOI: https://doi.org/10.2478/jeb-2020-0015

Keywords
Productivity growth, Economic integration, Eurozone, Panel data

© 2020 León Padilla, published by Sciendo

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.

Can Monetary Integration Improve Productivity? Empirical Evidence of Eurozone

Published Online: Dec 31, 2020

Page range: 57 - 69

DOI: https://doi.org/10.2478/jeb-2020-0015

KeywordsProductivity growth, Economic integration, Eurozone, Panel data

© 2020 León Padilla, published by Sciendo

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.

Keywords
Productivity growth, Economic integration, Eurozone, Panel data