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2016 OECD Economic Surveys: Lithuania 2016

Economic Assessment

image of OECD Economic Surveys: Lithuania 2016

This 2016 OECD Economic Survey of Lithuania examines recent economic developments, policies and prospects. The special chapters cover: Productivity convergence and Inclusive growth.

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Scaling new heights: Achievements and future challenges for productivity convergence

GDP per capita rose from one third to two thirds of the OECD average level between 1995 and 2014, despite internal and external crises. Productivity catch-up was critical to this process, although the level of labour productivity also remains around one-third below the OECD average. Further convergence will partly rely on improvements in resource allocation. In particular, the government should promote better governance of state-owned enterprises, effective bankruptcy procedures and new forms of business financing. Convergence will also depend on policy settings that encourage advances in within-firm productivity growth. Improvements to the quality of education at all levels and increasing the role of workplace training will be important. However, so too will be further measures that encourage the innovation capacity of the business sector, including innovation policies that further promote the absorptive capacity of firms and do not favour incumbents at the expense of young firms.

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