The determinants of labour productivity growth are at the centre of both the European Union's contemporary research and policy agenda. Labour productivity growth is the key variable in economic growth and development theories dating back to R. Solow, and in contemporary approaches related to sustainable development. The importance for society is grounded on the fact that there is a shortage of research and results in this particular topic for the Baltic countries. While both the EU KLEMS and INTAN Invest databases contain complete information in this regard on other more developed economies. However, the Baltic countries have lacked, until now, this type of information and as a consequence they have no cultivation of research ability in this particular area. As a result, it was impossible to know the strengths and weaknesses of these countries and their position in comparison with other more developed countries. Following the patterns of change and the linear stages of economic growth and development theories, each country passes through particular stages of development that others have already experienced. For this reason, it is especially important to lift the curtain for the Baltic States and examine their path and foresee the possible future changes they may experience by comparing them with the path taken by other more developed economies.
The project has applied the growth accounting methodology to the Baltic countries in order to obtain detailed productivity growth determinants at industrial level and in the aggregated market economy. To this end, a new database —following the EU KLEMS and INTAN Invest methodology with a particular focus on intangible capital— has been constructed. The project analyses the determinants and tendencies of growth for the Baltic countries within the context of more developed economies (e.g. Denmark, Germany, Spain, Sweden) and uncovers the productivity gains associated with different types of capital assets. First, an overview of the economies and the structural changes they have experienced during the period analysed is presented. Second, a strategy is designed to derive new intangibles and EU KLEMS data for the Baltic countries. Third, statistical data are constructed for all economies and the growth accounting method is applied in order to obtain comparable results. Finally, an economic analysis is conducted to detect certain aspects of the growth determinants for differently developed and structured economies. In conclusion, the economic analysis of the productivity growth determinants for the Baltic countries is performed for two time periods, namely before and after their entry into the European Union.
The overall objectives are as follows:
1. To compose the platform of EU KLEMS data for the Baltic countries.
2. To compose the platform of INTAN Invest data for the Baltic countries.
3. To apply the EU KLEMS methodology and the growth accounting method for the Baltic states (Estonia, Latvia, Lithuania) and more developed countries (Denmark, Germany, Spain, Sweden). Derive results.
4. To compare the results derived from two complimentary perspectives: determinants of productivity growth and patterns of structural change.
5. To communicate and disseminate the results to society.
6. To continue working on this topic in order to have up-to-date information for the Baltic states within the context of others.
The project has fully accomplished the objectives set for the period.
The research objectives for the period 1995–2015 regarding research methodology, approach and training have all been achieved and are described in detail in the two following publications:
o ‘Productivity growth determinants of differently developed countries: comparative capital input results';
o ‘Productivity determinants and their contributions to productivity growth in the Baltic countries before and after their entry into the European Union: a comparative industrial perspective’.
