The V4: A decade after the EU entry

Abstract

Objective: The objective of the paper is to give a picture of the sources of economic growth in the V4 countries during the decade following their EU entry and to crosscheck the results obtained by parametric and non-parametric approaches. Growth accounting technique is used to depict dynamics of the V4 countries evolution since 1995 up to 2013. The poor post-crisis performance reflected in TFP indicator is in line with the result of the absence of technological progress obtained by data envelopment analysis. Research Design & Methods: Sources of the economic growth are identified by growth accounting based on Solow-Swan model. Non-parametrical part employs an SBM measure of efficiency in Data envelopment analysis as an application of linear programming optimization. Findings: Main findings include determining faster-than-average economic growth of the V4 followed by a considerable decline both in total factor productivity and in catching-up rate in the after-crisis period. DEA approach reveals excessive use of labor in all of the V4 countries and finds almost negligible technological change. Implications & Recommendations: The main concern for economic policy in the V4 as well as the entire EU continues to be tackling unemployment and facilitating factors´ productivity by structural reforms. Contribution & Value Added: The paper makes use of parametric and non-parametric approaches with a view to cross-checking the results obtained on the technological change within the EU at large and across the V4 countries in particular.