Cost Competitiveness in the Food, Beverages and Tobacco Manufacturing of the EU and the USA: A Convergence Analysis

 Panos Fousekis

 

Abstract

Time-series tests and analysis of disparities over time are employed in this paper to investigate convergence of cost competitiveness in the food, beverages, and tobacco manufacturing of 14 EU countries and the USA. According to the empirical results, there has been no uniform pattern of convergence across all countries for any of the three variables (unit labor cost, labor productivity, and wages) considered. There have been, however, converging dynamics for certain countries something which is consistent with club formation.

Keywords: Competitiveness, Convergence, Food Manufacturing