Spain’s GDP would have been 15% higher if all the Spanish regions had improved their productivity at the same level as the more efficient ones
New study with results from the recently updated Investment and Capital Stock database
Spain’s capital endowments (durable productive assets, such as infrastructures, warehouses and commercial premises, machinery, computer equipment, etc.) place it at the top level of developed countries. However, it faces productivity challenges regarding exploitation and efficient use of resources, which are especially noticeable at regional level. For example, Navarre is the Spanish region that has highly improved its total factor productivity -the ability to jointly leverage capital and labor- during the period 2000-2014, with an annual growth of one percentage point. However, regions such as Balearic Islands, Murcia, Canary Islands and Asturias have experienced average annual setbacks of over half a percentage point. If all Spanish regions improved their productivity to the same level as Navarre, GDP in Spain would reach an annual growth rate of 2.3%, one percentage point higher per year.
This performance in productivity would increase Spain’s GDP per capita by 14.74%. These are some of the results taken from the study Ciclo económico. Acumulación de capital en España y crecimiento regional (en el siglo XXI) carried out by Ivie Researchers Matilde Mas, Lorenzo Serrano, Francisco Pérez and Ezequiel Uriel, in collaboration with Ivie technicians Eva Benages and Juan Carlos Robledo. The document analyzes information from the recently updated Investment and Capital Stock database, developed jointly by the BBVA Foundation and Ivie. Specifically, this database examines the series at national level for the period 1964 to 2015 and until 2014 for the 17 Spanish autonomous regions, 50 provinces, and two autonomous cities (Ceuta and Melilla). In 2015, the last year with available data, capital stock in Spain reached 3.2 billion euros, 0.6% more in real terms than in 2014. This growth rate is still considered weak when compared with the pre-crisis years in which the annual growth rate exceeded 4%.
Other messages highlighted in the report are:
- The evolution of efficiency or total factor productivity has been negative in Spain since the beginning of the century (-0.16% per year)
- Catalonia, Madrid, Andalusia and the Valencian Community account for nearly 60% of total Spanish investments
- The percentage of Madrid’s investments over total investments in Spain has increased 2.6 percentage points, while Catalonia has dropped 2.2 points
- Interregional differences in public services per capita have increased 36% in 20 years, and currently, some region’s endowments are double that of others
- Spain needs to exploit more effectively its human resources, but also its accumulated capital.