Abstract
This paper analyses the link between the tangible investment rate and apparent labour productivity in the European manufacturing industry. The research results show a negative and opposite relation between apparent labour productivity and investment rate, that is, changes in apparent labour productivity cause changes in investment in tangible assets but not vice versa. The findings do not show any significant differences among European countries when the relation between apparent labour productivity and investment rate is analysed. However, when analysing the gross investment in tangible goods, as well as in machinery and equipment, period effects are observed. A crisis and economic slowdown reduce investment in tangible capital. Meanwhile, the growth of the economy spurs more investment. The negative correlation between apparent labour productivity and investment rate indicates that investment in tangible assets is ineffective. An analysis on individual countries is required in order to reach more nuanced conclusions.
Highlights
Apparent labour productivity increased by 5.6% from 2012 to 2014
The amount of gross investment in tangible goods is significant as it accounted for 4.4% of the total production value and 18.5% of value added at factor cost of the entire manufacturing industry in 2014
It is relevant for new members of the European Union (EU), as an obvious gap in labour productivity can be observed and investment in tangible goods is high in comparison to the other EU countries
Summary
We aim to reveal the main characteristics of the relation between tangible investment rate and labour productivity in the European manufacturing industry and to find out if this link does not differ among countries and is stable over time
Sign-in/Register to view highlights & summary Sign-in/Register to access full text options 
Free) 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a call
