Firm behavior, market deregulation and productivity in Spain
AbstractThe aim of this paper is to analyze the evolution of productivity and how firm behavior and institutional conditions affects productivity. For that purpose, we use a longitudinal sample of Spanish manufacturing and services companies between 1983 and 2006, as well as OECD indicators on product market regulations. The productivity measurement is based on the control function approach, to overcome the endogeneity bias. Both for manufacturing and services firms, we have found that the share of temporary employment tends to reduce productivity, the effect being stronger for services firms, which make a more intensive use of this employment type. Our results also show that increases in competition lead to productivity improvements. Besides, those manufacturing firms who keep undertaking in-house production of services tend to be more productive. The lack of competition in the services sector may be preventing firms to increase specialization while outsourcing non-manufacturing activities.
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Bibliographic InfoPaper provided by Banco de Espa�a in its series Banco de Espa�a Working Papers with number 1035.
Length: 46 pages
Date of creation: Nov 2010
Date of revision:
TFP; Competition; Employment composition; Endogeneity;
Find related papers by JEL classification:
- L10 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - General
- L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
- L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure
- L23 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Organization of Production
- C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
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