The determinants of firms’ convergence to the European TFP frontier

Dolores An~o´n Higo´n, Juan A. Mañez, Mari´a E. Rochina-Barrachina, Juan A. Sanchis Llopis () and Amparo Sanchis-Llopis
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Dolores An~o´n Higo´n: Department of Economic Structure, University of Valencia, Avda. dels Tarongers s/n, 46022 Valencia (Spain).
Mari´a E. Rochina-Barrachina: Department of Economic Structure, University of Valencia, Avda. dels Tarongers s/n, 46022 Valencia (Spain).
Authors registered in the RePEc Author Service: Maria Engracia Rochina Barrachina

No 1707, Working Papers from Department of Applied Economics II, Universidad de Valencia

Abstract: In this article we characterize Total Factor Productivity (TFP) frontier firms at the industry level within the European Union during the period 2003-2014, and explore the determinants of the firms’ distance to the frontier. We find that larger, more capital-intensive, and more labour skilled firms are closer to the productivity frontier. In contrast, older firms are further away from the frontier. In addition, we obtain that a number of countries' economic and institutional factors, such as tertiary education, trade openness, easiness in getting credit and governance quality, all positively affect the catching up of laggards towards the productivity frontier. We also examine the moderating effect of the Great Recession on these determinants and obtain differentiated patterns.

Keywords: TFP; frontier firms; laggard firms; Great Recession; European Union countries (search for similar items in EconPapers)
JEL-codes: F43 O47 O52 (search for similar items in EconPapers)
Date: 2017-07
New Economics Papers: this item is included in nep-eff, nep-sbm and nep-tid
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Persistent link: https://EconPapers.repec.org/RePEc:eec:wpaper:1707

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