Determinants of total factor productivity in eight European countries
ENSince the study of Solow (1957) that recognised that growth in developed economies was not due to accumulation of production factors, but a residual – total factor productivity (TFP), TFP and its determinants became important topic of research. TFP growth has become the most important factor of growth in developed and developing countries. The aim of this research is to find TFP determinants in eight European countries through implementation of empirical analysis and to recognise the more effective ones. Understanding the TFP growth determinants is important to build individual growth model. The article analyses the determinants of TFP growth in eight European countries: Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Slovak Republic and Slovenia during 1997–2016. The theory indicates there are such determinants of TFP growth as trade openness, R&D, foreign direct investment, education, institutional framework. The study takes these determinants into account and bases the analysis on panel data and regressions. The results show a positive, significant influence of openness of trade and the share of labour force with tertiary education on TFP growth. Unfortunately, such variables as FDI share and R&D expenses that were expected to have positive influence do not appear as significant determinants of TFP growth.
