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Firms’ distance to the European productivity frontier

Author

Listed:
  • Dolores Añón Higón

    (Faculty of Economics (Universitat de València))

  • Juan A. Máñez

    (Faculty of Economics (Universitat de València))

  • María E. Rochina-Barrachina

    (Faculty of Economics (Universitat de València))

  • Amparo Sanchis

    (Faculty of Economics (Universitat de València))

  • Juan A. Sanchis

    (Faculty of Economics (Universitat de València))

Abstract

In this article we explore the factors contributing to reduce the distance of laggard firms to the European frontier, focusing on institutional factors. To characterize Total Factor Productivity frontier firms within industries for the European Union we use firm level data from AMADEUS for the period 2003–2014. Our findings provide evidence on the importance of governance quality and easiness in getting credit in explaining the distance of laggard firms to the European productivity frontier. We also find that other factors at the country level -tertiary education, R&D stock, and trade openness- and at the firm level -size, age, and capital-intensity- influence the distance of laggards to the frontier. In addition, we examine the role of the Great Recession in moderating the contribution of all these factors to reduce firms’ distance to the European productivity frontier.

Suggested Citation

  • Dolores Añón Higón & Juan A. Máñez & María E. Rochina-Barrachina & Amparo Sanchis & Juan A. Sanchis, 2022. "Firms’ distance to the European productivity frontier," Eurasian Business Review, Springer;Eurasia Business and Economics Society, vol. 12(2), pages 197-228, June.
    • Handle: RePEc:spr:eurasi:v:12:y:2022:i:2:d:10.1007_s40821-022-00207-2
    DOI: 10.1007/s40821-022-00207-2
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    More about this item

    Keywords

    Total Factor Productivity; Frontier firms; Laggard firms; Institutional factors; Great Recession; European Union countries;
    All these keywords.

    JEL classification:

    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • O52 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Europe

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