Productivity of services in the countries of Central and Eastern Europe : analysis using Malmquist indices

This research aims to study the growth of productivity in the service sector in the former Central and Eastern European Countries (CEECs) and their determinants. For this purpose, non-parametric frontier techniques were used to measure the variations in productivity and determine the explanatory factors of these changes in total factor productivity; the methodology of the Malmquist index with output orientation and its decomposition in technical change, pure technical efficiency and scale efficiency was used for the period 2000-2019. The results obtained indicate that the productivity of services in the most recently incorporated countries grew by 1.3 per 100 on average per year compared to 1.6 per 100 in manufacturing. The most important driver of such growth was found to be improvement in technical change (frontier shift) rather than improvement in efficiency.