International Journal of Production Economics 195 (2018) 54–65

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International Journal of Production Economics

journal homepage: www.elsevier.com/locate/ijpe

Verifying the relation between labor productivity and productive efficiency

by means of the properties of the input-output matrices. The European case


Miguel-Angel
n *, María-Jesús Guti
errez-Pedrero, Fernando E. Callejas, Isabel Martínez-
Taranco
Rodríguez
Faculty of Law and Social Sciences, University of Castilla – La Mancha, Ronda de Toledo, s/n., 13071, Ciudad Real, Spain

A R T I C L E I N F O A B S T R A C T

Keywords: This article discusses the relationship between labor productivity and the degree of production efficiency for 24
Productive efficiency countries inside the European Union (EU) over a period of 17 years. A panel data econometric model is used to
Input-output estimate it. To this end, an indicator of productive efficiency has been applied. It is based on the dominant
Dominant eigenvalue eigenvalue of the matrix of technical coefficients of the input-output model. This indicator allows the relationship
Labor productivity between the economic sectors of each country and its productive technologies to be taken into account. The
European Union
results reveal a significant relationship between the proposed productive efficiency indicator and labor produc-
tivity. Finally, several implications from a policy perspective are suggested as concluding remarks.

1. Introduction
One of the most important indicators when measuring the economic
welfare of countries is the gross domestic product (GDP) per capita and
its growth. There are stylized facts showing a close relationship between
the growth of GDP per capita and of labor productivity (Balk, 2014). For
instance, Marattin and Salotti (2011) show pronounced similarities be-
tween the growth rates for both variables in the case of a set of 19 OECD
countries over the period 1980–2005. Porter (1990) suggests that one of
the causes of this relationship may be that increased productivity is
associated with an improvement in competitiveness since in those sectors
where productivity rises, a competitive advantage takes place, allowing
market share in a globalized economic environment to be maintained or
increased and therefore contributing to the economic growth of the
country. Following this line of reasoning, Demeter et al. (2011) conclude
that labor productivity is one of the sources of business success and thus
contributes, from an aggregated point of view, to the national income.
In the case of the European Union (EU), the above relationship is
evident in representing growth rates of both variables,1 calculated for a
sample of 24 countries2 during the period (1996–2016), as shown
in Fig. 1:
As shown in Fig. 1, both variables have experienced very similar
evolution over the period: a recovery in growth in the 90's, at which point
it started from negative growth rates; a stabilization of the growth rates
of both variables around 2% until 2007, a sharp drop in growth rates in
2008 and 2009, and a return to positive growth rates, although small,
from 2010 to 2016. To be accurate, both sets of data share a correlation
coefficient of 0.808. Therefore, within the EU, this association between
GDP per capita and labor productivity is linked.
It can be definitively concluded that, improvements in labor pro-
ductivity involve a growth in the GDP per capita and thus in economic
well-being. Therefore, it is relevant from a policy point of view, to
perform the analysis of driving factors affecting labor productivity in
order to implement policies for enhancing rates of growth.
Starting from the well-known Solow's model of economic growth
(Solow, 1957), labor productivity can be decomposed into two main
factors: capital intensity and a term called total factor productivity (TFP).
TFP includes a number of factors such as technical and organizational
progress, capacity utilization, quality of factors of production, R&D
effort, education, etc. (Palazuelos and Fern
andez, 2009). Among these
factors, Balk (2001) highlights the productive efficiency.
Productive efficiency, in a technical sense, is understood as maxi-
mizing the level of output given an amount of input used to produce such
output (Debreu, 1951; Farrell, 1957). More specifically, production

* Corresponding author.
E-mail address: miguelangel.tarancon@uclm.es (M.-A.
Taranc
on).
1
The GDP per capita was calculated as the ratio between the GDP added at constant 2010 prices and the sum of the populations of the countries. Labor productivity is the average of
productivities of each country, calculated as the ratio between the GDP at constant 2010 prices and hours worked in each country. The data comes from the annual macro-economic
database of the European Commission (AMECO).
2
The 28 EU member countries excluding Croatia, Cyprus, Luxembourg and Malta.

https://doi.org/10.1016/j.ijpe.2017.10.004
Received 19 February 2017; Received in revised form 27 September 2017; Accepted 3 October 2017
Available online 6 October 2017
0925-5273/© 2017 Elsevier B.V. All rights reserved.

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M.-A. on et al. International Journal of Production Economics 195 (2018) 54–65

Fig. 1. GDP per capita vs. Labor Productivity. 24 EU-Countries (1996–2016). Rates of Growth.
Source: own elaboration from AMECO Database.

efficiency is linked to the existing production technology, since it allows
suitably combining different amounts of input for a given volume of
output targeted. Thus, the degree of production efficiency of a country
quantitatively synthesizes technological aspects such as intensive use of
information technology and communications (ICT) or organizational and
firm operational processes (Demeter et al., 2011), as these things entail a
reduction of inputs, especially intermediates, for the target set as output.
In this context, this article is intended to undertake a process of
verifying the existence of a statistical relationship between the degree of
production efficiency and labor productivity of European economic sys-
tems, to test whether such a degree of technical efficiency is a determi-
nant of improved productivity and hence competitiveness and
economic growth.
There are only a few of previous studies where the relationship be-
tween labor productivity and productive efficiency is assessed at country
level. Table 1 shows some of those contributions.
In accordance with the studies above, efficiency plays different roles
in its relation with labor productivity growth, depending on the
geographical and/or the time-period sampled. Therefore, the estimation
of such a role in the case of EU countries may be a major contribution in
order to design policies to increase labor productivity.
There are two main approaches in order to assess the effect of pro-
ductive efficiency in labor productivity: parametric and non-parametric
methods, as is explained in Section 2. In this paper a parametric tech-
nique based on specifying a static data panel model has been applied as it
Table 1
Studies related to the relationship between labor productivity and productive efficiency at
country level.
Reference Scope of application Synopsis
enables us to explain the behavior of labor productivity by the specifi-
cation of a number of regressors, including the productive effi-
ciency itself.
In contrast with other approaches, production efficiency has been
estimated on the basis of the structure of input-output systems. This
approach has the advantage of considering the technology of all sectors
of the productive system and the technical relations established amongst
them, summarizing this complex network of technical relations into a
single indicator, which is the dominant eigenvalue of the matrix of input
coefficients of the input-output system.
When the indicator of productive efficiency based on input-output
technical structure is obtained for each country of the EU, the data
panel model is estimated. The results confirm the existence of a direct
and significant relation between labor productivity and productive effi-
ciency and they are also relevant from a policymaking consideration.
Accordingly, the main sectors that play an important role in the overall
efficiency of the productive system have been identified by analyzing the
output structures of EU economies. The application of technological
policies to improve the efficiency in such sectors will spread their effects
to all the economic system through the network of technical relations
existing among the totality of productive sectors.
The article is structured as follows. The next section suggests an in-
dicator of production efficiency based on the properties of the matrix of
technical coefficients of the input-output table. The third section models
the relationship between labor productivity and productive efficiency in
a group of 24 EU countries in the period 1995–2011, by estimating an
econometric panel data model. A fourth section sets out the main
conclusions.
2. The measurement of degree of productive efficiency

Henderson and 52 countries, Important impact in Asian and Latin When measuring and comparing the efficiency of various units within
Rusell (2005) 1965–1990. American countries. Moderate impact in
OECD countries.
a production system, the strategy is usually given by the estimate of a
Margaritis 19 OECD countries, Efficiency improvements have made a border that traces the optimal technology to produce the target output
et al. (2007) 1979–2002 strong contribution to labour productivity from the necessary inputs. This production frontier is obtained from
for Ireland and Finland, whereas Canada empirical evidence, and in essence is a question of identifying by a
and Spain had the worst record.
mathematical procedure the best practice for obtaining the output. The
Badunenko 98 countries, Efficiency is the cause of the emergence of
et al. (2013) 1965–2007 bimodality in the distribution of output per distance of each specific unit to this border will establish its level of
worker. production efficiency. There are several available methodologies for
Walheer (2016) 20 OECD countries, Efficiency change contributes negatively to obtaining this frontier reference (Hollingsworth et al., 1999; Murillo-
1995–2008 labor productivity gains. Zamorano, 2004), mainly non-parametric techniques related to data
Source: own elaboration. envelopment analysis (DEA) (Seiford, 1996; Neumann et al., 2016), and

55

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M.-A. on et al.
econometric estimation techniques based on stochastic frontier models
for panel data (Greene, 2008; Filippini and Greene, 2016).
When units of the analyzed system are, in turn, complete economic
systems, for example a set of national economies, obtaining a border for
global optimum production is complicated because each country has a
production system consisting of multiple sectors, each with its own
technology, which involves its own productive mix. Simultaneously, each
productive sector interacts with other sectors as demander or supplier of
inputs, which means that a change in the mix of inputs of a sector has
direct or indirect consequences on the productive efficiency of all eco-
nomic sectors (Cella and Pica, 2001); and they differ from one country to
another. Therefore, obtaining a production frontier for a set of countries
is, from a global point of view, a difficult task, as the sectoral realities of
each country are far from homogeneous.
In this context, an alternative approach to measuring and comparing
the overall productive efficiency of various inter-sectoral production
systems involves the use of an input-output framework. The input-output
analysis can take into account, when assessing the overall productive
efficiency of the various production systems, the complexity of multi-
sectoral production systems in which many technologies are interrelated.
Thus, in the input-output framework, various alternatives to esti-
mating possibilities for the frontier of global production of multi-sectoral
production systems have been developed, mainly by means of linear
programming models (Cella and Pica, 2001; ten Raa, 2005; Lin and Shao,
2006; ten Raa and Sahoo, 2007; Prieto and Zofío, 2007). However, since
every economic system faces a final demand vector with a different
structure than the rest, and its sectoral outputs are adapted to this vector,
it concludes that it is difficult to establish a production function or
optimal common border for all economic systems under study. This paper
therefore proposes as an alternative to study the degree of overall pro-
duction efficiency of economic systems without taking into account the
different vectors of final demand, by a method based on the exploration
of the characteristics of the matrix of technical coefficients of the system
input-output approach to economies.
Specifically, this methodology comes from the identity of demand
approach to an input-output system of n productive sectors:
x ¼ Ax þ y (1)
where x is the vector (nx1) of sectoral outputs; A is the matrix (nxn) of
x bring to. A lower λmax , these technologies involve a more efficient pro-
technical production coefficients for typical element aij ¼ xijj , where xij is
purchases by industry j of inputs produced by industry i, and xj the output
of sector j; and y is the vector (nx1) of final demand.
Obviously, the coefficient matrix A is non-negative, since aij  0 ∀ i, j.
In addition, such a matrix is irreducible. Because of these two charac-
teristics, the coefficient matrix A satisfies the Perron-Frobenius theorem
(Dietzenbacher, 1988, 1992) which describes the properties of the
dominant eigenvalues and their associated eigenvectors in a matrix of
this type.
The theorem of Perron-Frobenius, applied to the matrix of technical
coefficients A, results in the existence of a positive real number λmax
which is an eigenvalue of that coefficient matrix, called the dominant
eigenvalue of A, so that any other eigenvalue λ of matrix A is strictly less
than λmax in absolute value (jλ j < λmax). In addition, it can easily be
demonstrated that 0 < λmax < 1 and, under the formula Collatz-Wielandt,
λmax increases when some element of A increases.
On the other hand, λmax is a simple root of the characteristic poly-
nomial of A, so the space of right eigenvectors associated to λmax is uni-
dimensional and there can only be a single linearly independent vector,
the remaining eigenvectors being proportional to it. The same applies to
the space of left eigenvectors. Both eigenvectors, the right z ¼
ðz1 ; z2 ; …; zn Þ and left q ¼ ðq1 ; q2 ; …; qn Þ, have all their components
positive. Thus, taking the right eigenvector, it will have:
Az ¼ λmax z (2)
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International Journal of Production Economics 195 (2018) 54–65
Assuming in (1) a null final demand vector3 y ¼ 0, i.e., the closure of
the model, then said the eigenvector z corresponds to the output vector of
the economic system x, i.e. z ¼ x. In this case, the output vector is not the
one determined by the final demand corresponding to the productive
sectors; but the one which allows the intermediate inputs of all sectors to
involve the same share of the sectoral output. Therefore developing
expression (2):
8
>
> a11 x1 þ a12 x2 þ … þ a1n xn ¼ λmax x1
<
a21 x1 þ a22 x2 þ … þ a2n xn ¼ λmax x2
(3)
>
> ⋮
:
an1 x1 þ an2 x2 þ … þ ann xn ¼ λmax xn
Furthermore, if one takes into account the basic demand identity (1),
we have:
λmax xi ¼ xi  yi (4)
where, solving:
yi
λmax ¼ 1  (5)
xi
It is deduced from (3) and (5) that the λmax dominant eigenvalue
represents the proportion of sectoral output which is intended for in-
termediate consumption; that is, it is not intended for final demand,
assuming that the output vector is the one that maintains this proportion
(and therefore the proportion allocated to final demand) constant for
all sectors.
This conception of λmax is suggested by Duchin and Steenge (2007). As
an aggregate level 1  λmax indicates the percentage of added value of the
economy, realizing that the higher λmax (which as we know is positive
and less than 1), the higher the output dedicated to serving as interme-
diate inputs and, therefore, the lower the added value. Thus λmax is
inversely proportional to the level of efficiency, since a reduction in its
magnitude indicates that the production system needs smaller interme-
diate inputs to produce, increasing the added value and, therefore, its
ability to grow.4
In short, λmax synthesizes the production technologies of the economic
system represented in the input-output table in the sense that measures
the magnitude of intermediate consumption to which these technologies
duction system since, overall, it needs smaller intermediate inputs to
handle production or, in other words, the production system is able to
generate higher added value.5
Taking this indicator as our measure of production efficiency, in the
next section the degree of productive efficiency is described in the case of
24 European countries, taking as an example the period 1995–2011.
3. Productive efficiency in 24 EU countries
As described in the previous section, based on the calculation of the
dominant eigenvalue of the matrix of technical coefficients of the input-
output table, the degree of production efficiency in a panel of 24 coun-
tries of the EU has been studied. For this we have used the series of ho-
mogeneous input-output tables provided by the World Input-Output
Database (WIOD) (Dietzenbacher et al., 2013), for the
period 1995–2011.
3
That assumption is established in order to analyse the productive system from an
exclusive technical point of view, i.e., without the involvement of elements which are
exogenous to the strictly technical relations among sectors.
4
In fact, this approach is closely related to the Theory of the Uniform Rate of Growth of
the Economy (see Solow and Samuelson, 1953; Takayama, 1985; among others).
5
This interpretation is in accordance with that of Marengo (1992), who proposes using
the dominant eigenvalue as an indicator of the intensity which a productive system de-
mands intermediate goods and services, independently of the composition of the final
demand vector.

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Fig. 2. Average dominant eigenvalues by country (1995–2011). 24 European countries.
Source: own elaboration.
Thus, in Fig. 2 the average value of the dominant eigenvalue for each
country is shown as well as the value for 2011.
As shown in the figure, generally there are slight variations between
the dominant eigenvalues of the input-output tables of last year available
(2011), and the average values of the series of tables 1995–2011. This is
indicative of the relative stability of the dominant eigenvalues and
therefore the degree of productive efficiency of different countries. Two
exceptions should be pointed out. The first is Austria, a country whose
dominant eigenvalue corresponding to 2011 is significantly higher than
the average of the historical series, which implies a loss of productive
efficiency. The second is Estonia, a country that is experiencing the
opposite process: the dominant eigenvalue corresponding to 2011 is
appreciably lower than the average value of the historical series, which
implies a gain of productivity.
The averages of the dominant eigenvalues of each country were used
to create three groups of countries. The first group is formed of those
countries with the lowest average dominant eigenvalue and which,
therefore, have the highest degree of productive efficiency. This group is
made up of Germany, Denmark, France, the United Kingdom, Greece,
Lithuania and the Netherlands, all of which have a dominant eigenvalue
less than 0.50. The second group is formed of those countries whose
average dominant eigenvalue oscillates between 0.51 and 0.55. These
countries are Austria, Spain, Finland, Ireland, Italy, Latvia, Poland,
Portugal, Slovenia and Sweden. A third group is made up of those
countries whose average dominant eigenvalue for the period are higher
than 0.56. These countries are Belgium, Bulgaria, Hungary, Rumania, the
Czech Republic, Slovakia and Estonia.
The three groups above were used as a basis to represent the evolu-
tion of their respective averages of the dominant eigenvalue, together
with the global average of all countries. These series are shown in Fig. 3.
As can be seen in the figure above, the dominant eigenvalue has, on
average, been increasing since 1999, with some decreases such as that
which occurred in 2009. This signifies that, when considering the entire
historical series together, the 24 European countries studied have un-
dergone a global decrease as regards productive efficiency in the sense
that their technologies globally require more intermediate inputs in order
to develop their production processes.
If the evolution of the means of the three groups is observed, it will be
noted that this increase in the dominant eigenvalue has been very
moderate in the group of countries with the highest average productive
efficiency (that is, the one with the lowest average dominant eigenvalue).
Moreover, the level of productive efficiency of these countries has a
lower variance than that of the others. The average dominant eigenvalue
of the countries in group 2 has, however, undergone a considerable
57
International Journal of Production Economics 195 (2018) 54–65
increase, particularly since 2003, which also indicates a higher disper-
sion of this mean of the productive efficiency. The countries in group 3
have, on the contrary, undergone a progressive decrease in the average
dominant eigenvalue since 2001, which implies an increase in their level
of productive efficiency. In short, the behavior of the means of the
dominant eigenvalues of the three groups, and particularly the last two,
leads to the idea of a progressive convergence of their levels of produc-
tive efficiency, whereas the first group shows a steady level.
From the sectoral structure of the output of the productive system of
each country in 20116 and the average percentage of the output of each
sector in each group, there are a few points to be noted.
 Generally, in countries of group 1 (those that show a higher degree of
productive efficiency) close to 63% of the output of the production
system is generated by service sectors (sectors 19 to 34). Such a
percentage decreases to 56% and 49% in groups 2 and 3, respectively.
The differences among the percentages are particularly intense in
sectors Renting of Machinery and Equipment and Other Business Activ-
ities; Health and Social Work; and Financial Intermediation.
 The average percentage of total output produced by manufacturing
sectors is 24% in group 1, whereas this percentage raises to 28.6% in
group 2 and 33% in group 3. Therefore the weight of the output of
manufacturing sectors is lower, on average, in countries included in
group 1.
 Specifically, the differences in the observed percentages of group 3
with regard to groups 1 and 2 are relevant in sectors Electrical and
Optical Equipment; Basic Metals and Fabricated Metal and Transport
Equipment.
 Finally, it is also worth noting the differences in the percentages in
Construction sector in groups 2 and 3 with respect to group 1.
In conclusion, the relationship between the degree of productive ef-
ficiency of the productive system of each country and the importance of
the role played by service sectors in this system seems clear. The greater
the proportion of output generated by the service sectors, the higher the
productive efficiency of the system (i.e., the lower dominant eigenvalue).
Having described the behavior of the level of production efficiency
from the indicator described, in the following section the relationship of
such a degree of efficiency with the evolution of productivity at work in
these 24 countries has been studied, with the approach of an econometric
panel data model.
6
See Appendix B.

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Fig. 3. Average dominant eigenvalue by groups (1995–2011). 24 European countries.
Source: own elaboration.
4. The relationship between productive efficiency and labor
productivity in 24 EU countries
This section analyzes the relationship between labor productivity and
production efficiency, using the sample formed by the panel of 24
countries of the EU in the time period from 1995 to 2011,7 and esti-
mating an econometric model in which labor productivity assumes the
role of dependent variable and production efficiency, measured by the
indicator described in the previous sections (dominant eigenvalue of the
input-output coefficient matrix), along with other variables included in
the literature, as a regressor.
Fig. 4 shows the evolution in the behavior observed between 1995
and 2011 for productivity of average work of the 24 countries analyzed,
defined as the ratio between the GDP at constant 2010 prices and total
hours worked.
Labor productivity, on average, exhibits a first phase, falling from 26
euros/hour worked in 1995 to just over 25.44 euros/hour worked in
1998. Later, a second phase of moderate, prolonged growth led to an
increase in the average value of productivity to 30.54 euros/hour worked
in 2007. After two years in which labor productivity further declined to
29.16 euros/hour worked, as a result of the economic and financial crisis,
there has once again been growth in average labor productivity, albeit at
a weak pace, attaining the value of 30.88 euros/hour worked in 2011.
Clearly, average labor productivity obscures large differences be-
tween the 24 countries analyzed. Fig. 5 shows the both the average labor
productivity of each country over the period (1995–2011), and the fig-
ures for 2011.
As shown in the graph above, all countries except Romania and the
United Kingdom showed a higher than average labor productivity in
2011 for the period 1995–2011, consistent with the trend shown by the
average labor productivity of the countries shown in Fig. 2. Particularly,
the labor productivity of Denmark, Sweden, Belgium, Ireland, The
Netherlands and France is notable, with values exceeding 50 euros/hour
worked in 2011. Additionally, Germany, Finland and Austria exceed 40
euros/hour worked. On the contrary, Bulgaria, Romania, Latvia, Poland,
Lithuania, Hungary, Estonia, Slovakia, and the Czech Republic, i.e. the
countries of Eastern Europe and the Baltics, do not reach 20 euros/
hour worked.
In addition, Fig. 6 illustrates the evolution of the average labor pro-
ductivity according to the groups generated in Section 3:
As can be seen, the average labor productivity of group 1 (Germany,
Denmark, France, the United Kingdom, Greece, Lithuania and the
Netherlands) is higher than the other two groups along the period in
7
The availability of input-output tables means it is not possible to broaden the sample
beyond 2011.
58
International Journal of Production Economics 195 (2018) 54–65
consideration, whereas in Section 3 this group had the lowest average
dominant eigenvalue, i.e., the highest productive efficiency.
In contrast, group 3 has the lowest average labor productivity every
year, where as in Section 3 such a group had the highest average domi-
nant eigenvector (i.e., the lowest productive efficiency degree). An in-
termediate set of values, close to the global average for both variables can
be observed for group 2.
From a dynamic perspective, in group 3 the average labor produc-
tivity was declining until early 2000's, when this variable started to raise
gradually. This pattern is consistent with the evolution of the average
dominant eigenvalue (and thus with the productive efficiency degree),
which was increasing until 2001–2002, when it started to decrease.
Furthermore it is must be admitted that in groups 1 and 2 the average
labor productivity was rising in general whereas the average dominant
eigenvalue was stationary or showed a tendency to increase. Due to this
fact, it is fitting to point to the statistic relationship between the
two variables.
When checking the relationship in these countries between labor
productivity and productive efficiency, as has been mentioned above, we
estimate an econometric model of panel data in which the variables play
the role of dependent variable and explanatory variable, respectively.
The basic specification of the model following (Cameron and Trivedi,
2009) is:
X
k
yit ¼ αi þ βj xitj þ εit (6)
j¼1
where:
yit Dependent variable y for case i in period t.
αi Independent term.
βj Coefficient associated to regressor xj.
xitj Regressor xj for case i in period t.
εit Random perturbation corresponding to equation for case i and
period t.
There are two alternative approaches depending on the manner of
specifying αi . On one hand, in the case of fixed-effects model, such a term
is specified as follows:
X
N1
αi ¼ α0 þ γ m dm (7)
m¼1
where:
α0 constant value.

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Fig. 4. Labor productivity 1995–2011. 24 European countries. Average and rate of growth (euro/worked-hour and %).
Source: own elaboration based on AMECO database.
Fig. 5. Labor productivity per country. 24 European countries. Average 1995–2011 and 2011 (euro/worked-hour).
Source: own elaboration based on AMECO database.
dm dummy variable such as if m ¼ i, dm ¼ 1; and if m≠i, dm ¼ 0. When
i ¼ N, then dm ¼ 0.
γ m coefficient associated to dm .
On the other hand, in the case of random-effects model, the inde-
pendent term includes a random perturbation:
αi ¼ α0 þ ui
where:
α0 constant value.
ui random variable which takes the specific behavior of case i.
In addition to the productive efficiency other explanatory variables
have been specified in the literature. These explanatory variables shown
in Table 2:
From the neoclassical or supply view, the net capital stock per employee
(KSEMP) has been selected as an explanatory variable of labor produc-
tivity (Abramovitz, 1979), as an indicator of the relationship between
labor input and capital input. This relationship is considered basic to
determining the level of productivity factors (Wolff, 1991). Furthermore,
International Journal of Production Economics 195 (2018) 54–65
as was pointed out in the introduction section, capital accumulation is
neither a necessary nor a sufficient condition to increase labor produc-
tivity due to the effect of TFP. In consequence, it is necessary that the
intensification of the capital to labor ratio be accompanied by other
drivers such as technological innovation or organizational improvements
which can be summarized as productive efficiency factors. Therefore, this
variable, and production efficiency measured by the value of the domi-
(8) nant eigenvalue of the coefficient matrix input-output, can be considered
complementary variables in increasing labor productivity.
It has also been proposed as an explanatory variable the percentage of
GDP invested in innovation and development (RD), according to the tradi-
tion of the knowledge capital model suggested by Griliches (1979). In
this regard, several authors have highlighted how investment in R & D,
together with investment in physical capital, has a positive impact on the
productivity of companies (Griffith et al., 2004; Doraszelski and Jau-
mandreu, 2013; Luintel et al., 2014; Goya et al., 2016).
Millemaci and Ofria (2016) further pointed out the relevance of the
demand-side factors in contrast to the more extended supply-side factors
in order to explain the evolution of productivity. In fact, Cornwall and
Cornwall (2002) proposed that supply variables have a demand
perspective, according to which labor productivity is largely conditioned
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M.-A. on et al. International Journal of Production Economics 195 (2018) 54–65

Fig. 6. Average labor productivity by groups (1995–2011). 24 European countries.

Source: own elaboration based on AMECO database.

Table 2 increasing labor productivity (Griffith et al., 2004; Arnold and Hus-
Regressors specified in the model of the relationship between labor productivity and singer, 2005).
productive efficiency.
Finally, the situation in the labor market from the unemployment rate
Variable Description Units Source (UNEMP) is included, following authors like Cornwall and Cornwall
PEF Value of dominant – Created by the authors (2002) that suggest that when a relatively long period of high unem-
eigenvalue of the from the input-output ployment is recorded with a slow growth in demand, there is a greater
input-output coefficient tables WIOD. likelihood that excess productive capacity will arise, leading firms to
matrix (productive
efficiency).
introduce defensive strategies at the expense of productivity gains.
KSEMP Net capital stock of the Thousands Created by the authors All of the above variables have been specified in the model in
economy per employee. of euros from the data of AMECO Napierian logarithms, as usual, to reduce variability and facilitate the
and EUROSTAT. interpretation of the parameters in terms of elasticities. According to
RD Percentage of annual % Created by the authors
expression (6), the specification of the model is:
expenditure on R & D from the dates of AMECO
in relation to GDP. and EUROSTAT.
DD Domestic Demand. Millions AMECO. lnðLPÞit ¼ αi þ β1 ⋅lnðPEFÞit þ β2 ⋅lnðKSEMPÞit þ β3 ⋅lnðRDÞit
of Euros
þ β4 ⋅lnðDDÞit þ β5 ⋅lnðOPENESSÞit þ β6 ⋅lnðUNEMPÞit þ εit
OPENESS (Exports þ Imports)/PIB. Euros Created by the authors
from the dates of AMECO (9)
and EUROSTAT.
UNENMP Unemployment rate. % AMECO. where LP is the Labor Productivity. To select the type of initial esti-
mate model, the initial specification was submitted to the Hausman test
Source: own elaboration.
(Cameron and Trivedi, 2009), which resulted in the existence of sys-
tematic differences between estimates in the specification of the panel
by the value of domestic demand (DD). data model with fixed effects with respect to the specification of random
Palazuelos and Fern
andez (2009) suggest that domestic demand in- effects in the model, and the former type of model was selected as it
fluences labor productivity in three ways. First, by means of a scale effect, ensures consistency. However, after the initial estimate of the fixed effect
i.e., when the market increases by any component of aggregate demand, model, we contrasted the hypothesis of cross-sectional independence via
a wider use of installed capacity will be enabled, leading to the reduction the Pesaran test (De Hoyos and Sarafidis, 2006), resulting in the existence
of the capital–output ratio (Lajeunesse, 2005). Second, by a capitaliza- of cross-sectional dependence. In addition, the basic hypothesis of ho-
tion effect, i.e., if the aggregate demand increases through moscedasticity was tested using the Wald test, showing the existence of
non-residential investment, the productive capital will rise and with it heteroscedasticity and therefore the need to incorporate a hetero-
the capital–labour ratio as well as the labour productivity growth rate. scedastic pattern specification. Thus, due to the violation of both basic
And third, by a modernisation effect since increasing domestic demand assumptions, the estimation model was developed by and alternative
leads to a dynamism in investment and thus to a rise in productiv- Panel Corrected Standard Errors (PCSE) technique (Beck, 2001; Del Río
ity labor. et al., 2011), a more flexible technique that allows effects of both limi-
Furthermore, including the degree of openness of the economy (OPEN- tations on the quality of the estimates to be corrected. The estimation
ESS) under study (Wolff, 1991), measured as the sum of imports plus results are shown in Table 3.
exports per unit of GDP, has been considered. Behind the inclusion of this All parameters of the estimation are statistically significant at the 0.05
variable is the idea that a greater degree of openness facilitates transit level of significance, and give a high goodness of fit according to the
and exchange of production factors, products and technologies (Cornwall coefficient of determination R2. Regarding the economic interpretation
and Cornwall, 2002), so that competition between companies is of the parameters, the estimates for the KSEMP, RD, DFD and OPENESS
encouraged to reach international markets, which in turn leads to variables have a positive sign, which implies a direct relationship be-
increased productivity (Baumol, 1986). In this sense, many authors have tween labor productivity and such variables. The UNEMP variable,
stressed the importance of the process of internationalization of firms in however, is associated with a coefficient with a negative sign, implying

60

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M.-A. on et al. International Journal of Production Economics 195 (2018) 54–65

Table 3 determinants of increased labor productivity.

Model estimation relationship between labor productivity and productive efficiency.
Explanatory Variables PCSE estimation with
heteroscedasticity
lnðPEFit Þ 0.5965243
(-5.01)***
lnðKSEMPit Þ 0.6436674
(33.28)***
lnðRDit Þ 0.1329323
(6.15)***
lnðDDit Þ 0.0503719
(5.47)***
lnðOPENESSit Þ 0.1952815
(7.56)***
lnðUNEMPit Þ 0.0552539
(-2.58)**
Independent term 0.3380283
(-2.68)***
R2 0.9508
Note: In brackets the value of the t-statistic (***) Significant at 0.01 of significance (**)
Significant at 0.05 of significance, (*) Significant at 0.1 of significance.
Source: own elaboration.
compensation (trade off) with labor productivity in the oppo-
site direction.
In terms of productive efficiency, valued by the specification of the
PEF variable (dominant eigenvalue of the coefficient matrix input-
output, as discussed in Section 2), the empirical evidence seems to sup-
port the fact that such efficiency has a statistically significant effect on
labor productivity. This effect may be because, in short, production ef-
ficiency can be understood in terms of the result of technological and
organizational improvements (Balk, 2001) which, among other things,
reduce the requirement for intermediate inputs into sectoral production
in the economic system, causing on the one hand, an increase in gener-
ation of value per unit of output produced and on the other, the need for
fewer hours of work to create that value.
The above notwithstanding, a simple analysis of correlation of the
relationship between labor productivity and productive efficiency (in an
aggregated manner) can lead to wrong conclusions. Therefore it is
convenient to complement the analysis above with an analysis by groups
of productive efficiency along the sample period. According to this,
looking at Figs. 3 and 6, a positive correlation8 between average pro-
ductive efficiency and average dominant eigenvalue in groups of coun-
tries 1 (the most efficient countries) and 2 (countries with a medium
efficiency) can be stated; whereas there is no such a relation in group 3
(the least efficient countries). That is, in groups 1 and 2 we obtain that the
lower productive efficiency (i.e., the higher eigenvalue), the higher the
labor productivity. Therefore two of the three groups of countries show
an evolution which does not match the expectations. However, in spite of
this, it seems clear that globally, the positive relation between labor
productivity and productive efficiency is fulfilled in the long run: the
lowest dominant eigenvalues (group 1) correspond with the highest labor
productivity values for each year of the sample period. In the case of
group 3, the opposite occurs; and both values remain in an intermediate
position in case of group 2.
The final section summarizes the main conclusions of the research.
5. Concluding remarks
Labor productivity has a close relationship with the living standards
of economies. In the case of EU countries, such productivity, measured as
GDP per hour worked has increased from an average of 25.4 euros/hour
worked in 1997 to 32 euros in 2016, although the growth rate has been
declining progressively. It is therefore important to study the
8
The correlation coefficients for groups 1, 2 and 3 are 0.38, 0.93 and 0.45
respectively.
Specifically, this article focuses on the role of efficiency productive as
Expected Sign determining of labor productivity, defined as the set of alternative
technologies that enable the right combination of inputs to achieve with
() a minimum amount of these, a target set in terms of output.
Measurement of the degree of overall productive efficiency of the
(þ) different EU countries analyzed was carried out by calculation of the
(þ)
dominant eigenvalues of the matrices of input-output coefficients of
these countries, because this indicator takes into account the techno-
(þ) logical configuration of all productive sectors that make up the economic
systems and its system of mutual relations. In addition, it is a purely
(þ)
technical indicator that is not influenced by the composition of final
() demand that may occur at a specific time.
From the estimation of an econometric model of panel data a com-
parison has been made of the role that, as determinants of labor pro-
ductivity, both the degree of productive efficiency, and other prominent
variables in literature play: the capital stock per employee, the efforts in
R & D, domestic demand, and the degree of openness of the country. As a
result, it is found that all specified determinants maintain a significant
and direct relationship with labor productivity. In the case of productive
efficiency this relationship could be given by the fact that the lower the
value of the dominant eigenvalue of the input-output matrix, the smaller
the magnitude of the matrix of technical coefficients. This coefficient
matrix by columns can be understood as an estimate of the production
functions of each of the economic sectors of a country, as it shows the
input requirements from the other sectors per unit of output of the sector-
column in question. If the magnitude of the coefficient matrix decreases,
it means that the technological relations between productive sectors
makes, globally, the inputs required to generate the total output of the
system lower, which results in turn in a relative increase of the total value
added for a set amount of labor and capital and therefore GDP, for a given
final demand.
The results of the analysis leads to the following practical and polit-
ical implications.
First, in contrast with other approaches, the role of the technical re-
lations among production sectors is taken into account. As consequence,
the analysis of the structure of the sectoral output of the countries may
provide interesting insights into the sectors which play a key role in the
global productive efficiency of a country. In turn, identifying these basic
sectors allows policymakers to focus their policies on such sectors in
order to boost such an international efficiency, since the effects of the
policies applying to these key sectors will be spread throughout all the
productive systems by means of the links between technological sectors.
Second, on the basis of the dominant eigenvalue of the input-output
matrices and the analysis of the sectoral structure of the output, the
relevance of service sectors can be highlighted. Particularly, countries
with the lowest dominant eigenvalues (i.e. with the highest productive
efficiency) generally show higher shares in determined service sectors
such as Renting of Machinery and Equipment and Other Business Activities;
Health and Social Work; and Financial Intermediation. Obviously, this
finding does not mean that policies should be oriented to promote a
transition from manufacturing to services, but rather to enhance the ef-
ficiency of service sectors contributing to improve the efficiency of all
productive sectors. For instance, several policies for boosting the effi-
ciency in service sectors may include supporting the deployment of ICT
innovations through a set of fiscal and financial incentives, removing
barriers to entrepreneurship and fomenting the creation of start-ups,
fostering the continuous training of the workforce, and enabling new
methods of management and company organisation.
Acknowledgements
We would like to thank two anonymous referees for providing us
valuable suggestions which helped us to improve the quality of the paper.
This paper is dedicated to the memory of Professor Dino Martellato
(1944–2016) at the Ca’Foscari University of Venice.

61
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Appendix A. Value of the dominant eigenvalue of the input-output coefficient matrix (1995–2011). 24 European countries

on et al.
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Austria 0.4641 0.4640 0.4654 0.4668 0.4681 0.4806 0.4941 0.4893 0.5046 0.5042 0.5220 0.5543 0.5601 0.5818 0.5932 0.6110 0.6161
Belgium 0.5476 0.5541 0.5596 0.5667 0.5721 0.5757 0.5786 0.5655 0.5557 0.5604 0.5648 0.5731 0.5782 0.5876 0.5697 0.5788 0.5898
Bulgaria 0.5770 0.5805 0.5782 0.5537 0.5653 0.5772 0.5805 0.5855 0.5933 0.6063 0.6239 0.6121 0.6188 0.6116 0.6196 0.6210 0.6220
Czech Rep. 0.6120 0.6045 0.6170 0.6114 0.6060 0.6152 0.6275 0.6189 0.6261 0.6264 0.6268 0.6396 0.6468 0.6426 0.6280 0.6591 0.6464
Germany 0.4524 0.4501 0.4518 0.4530 0.4565 0.4725 0.4704 0.4578 0.4614 0.4647 0.4771 0.4852 0.4914 0.4911 0.4725 0.4863 0.4938
Denmark 0.4599 0.4556 0.4613 0.4646 0.4620 0.4662 0.4754 0.4754 0.4676 0.4676 0.4919 0.4977 0.5075 0.5077 0.4920 0.4969 0.5087
Spain 0.5231 0.5236 0.5208 0.5223 0.5272 0.5418 0.5386 0.5381 0.5363 0.5434 0.5551 0.5660 0.5674 0.5690 0.5589 0.5611 0.5629
Estonia 0.5970 0.5600 0.5943 0.6219 0.6145 0.6362 0.8355 0.6519 0.7071 0.7371 0.5985 0.6074 0.5820 0.5737 0.5561 0.5562 0.5562
Finland 0.5252 0.5243 0.5231 0.5158 0.5159 0.5348 0.5206 0.5148 0.5240 0.5304 0.5432 0.5572 0.5485 0.5599 0.5547 0.5565 0.5659
France 0.4974 0.4899 0.4882 0.4863 0.4941 0.5131 0.5166 0.5091 0.5038 0.5083 0.5161 0.5228 0.5231 0.5256 0.5294 0.5387 0.5489
U. Kingdom 0.4804 0.4818 0.4804 0.4748 0.4774 0.4773 0.4774 0.4691 0.4622 0.4604 0.4624 0.4603 0.4583 0.4539 0.4547 0.4555 0.4526
Greece 0.4910 0.4785 0.4845 0.4727 0.4694 0.4841 0.5077 0.4755 0.4650 0.4807 0.4988 0.4801 0.4856 0.5022 0.4567 0.4575 0.4576
Hungary 0.5697 0.5684 0.5724 0.5777 0.5920 0.6051 0.6060 0.5903 0.5852 0.5754 0.5855 0.5968 0.5895 0.5899 0.5704 0.5851 0.5876
Ireland 0.5424 0.5477 0.5466 0.5478 0.5417 0.5500 0.5408 0.5315 0.5263 0.5325 0.5460 0.5467 0.5605 0.5625 0.5719 0.5763 0.5751
Italy 0.5167 0.5052 0.5132 0.5174 0.5243 0.5367 0.5381 0.5353 0.5358 0.5397 0.5457 0.5541 0.5567 0.5576 0.5306 0.5404 0.5406
Lithuania 0.5483 0.5330 0.5062 0.5062 0.4796 0.4603 0.4713 0.4750 0.4736 0.4749 0.4801 0.4903 0.5011 0.4948 0.4701 0.4709 0.4718
Latvia 0.5387 0.5601 0.5305 0.5547 0.5278 0.5436 0.5437 0.5310 0.5365 0.5675 0.6067 0.6050 0.5810 0.5859 0.5257 0.5256 0.5258
Netherlands 0.4891 0.4905 0.4921 0.4954 0.4958 0.5002 0.4964 0.4885 0.4819 0.4836 0.4838 0.4867 0.4880 0.4957 0.4912 0.4927 0.4974
Poland 0.5201 0.5227 0.5213 0.5189 0.5143 0.5349 0.5373 0.5353 0.5402 0.5484 0.5438 0.5559 0.5645 0.5621 0.5426 0.5543 0.5579
Portugal 0.5180 0.5159 0.5184 0.5160 0.5152 0.5352 0.5357 0.5309 0.5292 0.5398 0.5536 0.5480 0.5590 0.5542 0.5573 0.5579 0.5581
Romania 0.5742 0.5995 0.5789 0.5395 0.5628 0.5460 0.5612 0.5765 0.5837 0.5828 0.5719 0.5778 0.5659 0.5656 0.5644 0.5646 0.5657
Slovakia 0.6048 0.6187 0.6128 0.6196 0.6133 0.6164 0.6203 0.6178 0.6189 0.5937 0.5972 0.5930 0.5899 0.5964 0.5825 0.5842 0.5866
Slovenia 0.5530 0.5495 0.5436 0.5408 0.5333 0.5572 0.5558 0.5491 0.5449 0.5528 0.5548 0.5611 0.5681 0.5682 0.5486 0.5489 0.5491
62

Sweden 0.5031 0.5003 0.5033 0.5036 0.5038 0.5191 0.5233 0.5169 0.5096 0.5119 0.5196 0.5233 0.5275 0.5325 0.5219 0.5263 0.5295

Source: own elaboration.

International Journal of Production Economics 195 (2018) 54–65

Appendix B. Percentage of output by sector. 2011.

GBR DEU GRC DNK LTU NLD FRA AUT SWE ITA FIN PRT POL ESP IRL LTV SLO BEL ROU HUN BGR SLO EST CZE

1 Agriculture, Hunting, 1.07 1.29 3.36 2.63 4.96 2.21 2.53 1.86 1.60 1.65 2.35 2.58 3.68 2.25 1.47 4.37 2.27 0.95 7.06 5.75 4.86 3.15 3.30 2.28
Forestry and Fishing
2 Mining and 1.68 0.20 0.43 2.38 0.28 1.88 0.22 0.44 0.90 0.27 0.58 0.48 1.70 0.25 0.49 0.47 0.42 0.13 1.44 0.21 1.85 0.39 1.06 0.88
Quarrying

3 Food, Beverages and 2.68 2.95 5.21 4.13 6.85 5.67 3.56 3.12 2.28 3.98 3.03 4.05 6.32 5.12 5.66 4.66 2.59 4.01 7.70 4.36 5.33 2.52 4.58 3.60
Tobacco
4 Textiles and Textile 0.37 0.43 1.12 0.23 1.48 0.32 0.48 0.41 0.17 2.03 0.24 2.30 0.94 0.61 0.16 0.74 1.27 0.87 1.75 0.51 2.65 0.74 1.34 0.87
Products
5 Leather and 0.04 0.06 0.11 0.01 0.05 0.03 0.08 0.10 0.00 0.85 0.04 0.65 0.17 0.23 0.03 0.02 0.37 0.04 0.43 0.29 0.25 0.35 0.11 0.13
Footwear
6 Wood and Products 0.25 0.44 0.20 0.32 1.53 0.23 0.35 1.47 1.17 0.44 1.55 1.18 1.17 0.39 0.32 3.21 0.89 0.36 1.01 0.33 0.63 1.12 3.25 1.01
of Wood and Cork
7 Pulp, Paper, Printing 1.49 1.61 1.08 1.13 1.15 1.63 1.38 1.94 3.08 1.38 4.71 1.61 1.98 1.61 5.86 1.07 2.05 1.32 1.19 1.51 1.05 1.48 1.71 1.57
and Publishing
8 Coke, Refined 1.25 1.67 2.65 1.03 6.68 3.89 2.85 1.08 1.38 1.89 2.71 2.01 2.73 2.37 0.45 0.00 0.01 4.94 1.95 3.17 5.37 2.06 0.49 1.26
Petroleum and
Nuclear Fuel
9 Chemicals and 1.60 3.24 1.04 2.50 3.03 5.26 2.65 1.92 2.37 2.55 2.40 1.60 2.35 2.73 12.42 0.88 3.53 5.12 1.63 3.23 1.79 1.38 1.21 1.97
Chemical Products
10 Rubber and Plastics 0.72 1.36 0.47 0.64 1.16 0.62 0.98 0.90 0.63 1.10 0.81 0.89 2.07 0.99 0.44 0.45 1.92 0.83 1.16 1.96 0.88 1.55 0.80 2.64
11 Other Non-Metallic 0.47 0.80 0.81 0.50 0.68 0.54 0.70 1.09 0.61 1.13 0.81 1.52 1.58 1.30 0.48 0.72 1.04 1.06 1.66 0.91 1.96 1.25 0.97 1.37
Mineral
12 Basic Metals and 1.77 5.56 2.48 1.60 1.03 2.46 3.73 6.21 3.88 4.99 4.74 2.54 4.62 3.84 0.78 1.84 5.00 4.86 4.04 3.20 6.84 5.05 2.62 5.70
Fabricated Metal
13 Machinery, Nec 1.50 5.01 0.42 2.92 0.59 2.03 1.94 3.78 3.76 3.93 4.73 1.14 1.55 1.35 0.53 0.34 3.25 1.25 1.36 7.34 2.10 1.95 0.94 3.72
14 Electrical and Optical 1.34 4.38 0.52 2.83 1.04 1.79 2.21 2.92 3.57 2.20 5.14 2.07 2.17 1.25 8.85 0.69 3.17 1.12 1.76 8.27 1.47 6.52 3.14 7.50
Equipment
15 Transport Equipment 2.77 7.77 0.49 0.36 1.06 1.49 3.57 3.08 6.00 1.98 0.85 1.72 4.10 2.88 0.40 0.60 3.30 2.45 3.09 5.77 0.55 7.07 0.72 8.52
16 Manufacturing, Nec; 0.65 0.82 0.74 0.78 2.01 0.81 0.75 1.17 0.52 1.41 0.54 1.06 1.56 0.93 0.28 0.89 1.16 0.67 1.09 0.54 1.04 0.96 1.60 1.49
Recycling

17 Electricity, Gas and 3.29 2.74 2.51 2.15 4.91 3.39 2.34 6.07 2.41 2.86 2.25 4.44 4.01 3.71 1.73 5.02 3.25 1.88 5.42 4.13 4.04 7.91 4.23 3.65
Water Supply

18 Construction 7.14 4.89 6.84 5.82 6.56 6.42 6.92 7.56 6.22 6.13 7.99 8.70 9.10 11.79 5.01 11.85 11.44 7.56 11.01 3.65 11.98 9.73 8.30 7.29

19 Sale, Maintenance 2.01 1.14 2.02 1.31 1.92 1.43 1.35 1.45 1.28 2.34 1.68 2.47 2.61 1.98 0.73 1.47 1.87 1.61 0.79 1.23 1.20 1.04 1.62 1.15
and Repair of Motor
Vehicles and
Motorcycles; Retail
Sale of Fuel
20 Wholesale Trade and 3.55 3.81 7.47 6.78 6.44 6.36 5.34 5.60 4.84 5.97 4.59 4.85 5.58 3.47 3.64 6.00 5.39 6.22 4.87 3.98 4.51 6.57 5.40 5.09
Commission Trade,
Except of Motor
Vehicles and
Motorcycles
21 Retail Trade, Except 4.82 3.18 4.87 3.01 4.70 2.48 3.27 3.46 2.73 4.41 3.09 3.44 5.73 3.78 2.44 4.66 3.70 3.16 3.40 3.45 2.67 4.48 3.49 2.64
of Motor Vehicles
and Motorcycles;
Repair of Household
Goods
22 Hotels and 3.28 1.48 6.87 1.68 1.11 1.54 2.29 3.64 1.69 3.85 1.63 4.34 1.07 6.11 1.75 1.30 2.16 1.88 2.08 1.54 1.68 1.00 1.65 1.28
Restaurants
23 Inland Transport 2.05 1.56 1.71 2.32 5.83 1.75 2.06 2.51 2.69 3.69 2.48 2.19 3.70 2.71 1.45 4.88 3.27 2.35 4.86 2.68 4.33 3.88 4.30 3.05
24 Water Transport 0.31 0.64 3.95 5.46 0.32 0.43 0.41 0.02 0.62 0.28 0.67 0.25 0.08 0.16 0.26 0.22 0.27 0.67 0.11 0.03 0.53 0.02 1.54 0.01
25 Air Transport 0.49 0.61 0.74 0.52 0.31 0.69 0.41 0.58 0.43 0.32 0.71 0.87 0.19 0.59 1.36 1.05 0.32 0.37 0.24 0.40 0.25 0.03 0.31 0.30
(continued on next page)
(continued )

GBR DEU GRC DNK LTU NLD FRA AUT SWE ITA FIN PRT POL ESP IRL LTV SLO BEL ROU HUN BGR SLO EST CZE

26 Other Supporting and 1.63 2.21 0.71 1.70 3.75 1.49 1.75 1.96 3.38 1.88 2.92 1.47 1.55 2.43 1.54 3.19 2.12 3.81 1.30 1.43 1.28 1.74 6.27 3.32
Auxiliary Transport
Activities; Activities
of Travel Agencies
27 Post and 2.69 1.70 2.02 2.21 2.00 1.99 1.78 1.63 2.15 1.72 1.75 2.96 2.03 2.16 2.60 2.58 2.39 1.60 2.04 1.74 4.72 1.81 2.56 1.65
Telecommunications
28 Financial 7.85 5.01 4.70 4.65 2.27 6.79 4.96 4.31 3.01 4.39 2.35 5.40 3.26 3.72 7.87 4.21 3.67 5.24 2.01 3.21 3.58 2.91 2.90 3.31
Intermediation
29 Real Estate Activities 6.81 7.13 7.28 7.59 5.86 5.67 8.47 6.55 7.20 7.25 8.11 4.87 5.22 6.03 4.66 9.83 4.64 5.47 6.05 5.24 8.01 3.61 6.51 5.35
30 Renting of Machinery 13.18 10.04 4.45 10.18 4.71 10.30 13.37 8.60 10.85 8.33 7.41 7.80 5.12 7.24 11.62 7.33 8.49 12.78 5.51 6.63 1.81 6.47 8.34 7.08
& Equipment and
Other Business
Activities
31 Public Admin and 4.63 4.24 8.86 4.70 5.51 6.03 5.03 4.05 4.11 4.29 4.28 6.07 3.38 4.56 3.28 5.62 4.30 4.19 2.95 4.48 4.54 4.72 5.32 3.01
Defence; Compulsory
Social Security
32 Education 3.57 2.83 4.48 4.09 3.97 2.88 3.10 3.04 3.67 2.59 3.19 3.83 2.54 2.86 3.21 3.22 3.35 3.28 2.30 2.34 1.98 1.84 3.38 2.05
33 Health and Social 8.36 5.31 4.56 8.00 3.28 6.10 5.65 4.32 6.91 4.45 6.32 5.26 2.70 4.67 5.95 2.36 3.92 5.30 3.19 2.61 1.82 2.29 3.04 2.60
Work
34 Other Community, 4.71 3.88 4.84 3.87 2.96 3.40 3.53 3.15 3.86 3.45 3.35 3.38 3.42 3.94 2.28 4.28 3.20 2.63 3.56 3.85 2.44 2.42 3.00 2.67
Social and Personal
Services.

Source: own elaboration based on WIOD.


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M.-A. on et al. International Journal of Production Economics 195 (2018) 54–65

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