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Firm behavior, market deregulation and productivity in Spain

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  • César Alonso-Borrego

    () (Universidad Carlos III de Madrid)

Abstract

The 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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File URL: http://www.bde.es/webbde/SES/Secciones/Publicaciones/PublicacionesSeriadas/DocumentosTrabajo/10/Fic/dt1035e.pdf
File Function: First version, November 2010
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Bibliographic Info

Paper provided by Banco de España in its series Banco de España Working Papers with number 1035.

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Length: 46 pages
Date of creation: Nov 2010
Date of revision:
Handle: RePEc:bde:wpaper:1035

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Related research

Keywords: TFP; Competition; Employment composition; Endogeneity;

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  1. Van Beveren, Ilke, 2007. "Total factor productivity estimation: a practical review," Open Access publications from Katholieke Universiteit Leuven urn:hdl:123456789/382028, Katholieke Universiteit Leuven.
  2. Paul, Catherine J Morrison & Siegel, Donald S, 2001. " The Impacts of Technology, Trade and Outsourcing on Employment and Labor Composition," Scandinavian Journal of Economics, Wiley Blackwell, vol. 103(2), pages 241-64, June.
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Cited by:
  1. Juan Jóse Dolado & Salvador Ortigueira & Rodolfo Stucchi, 2011. "Does dual employment protection affect TFP? Evidence from Spanish manufacturing firms," Economics Working Papers we1137, Universidad Carlos III, Departamento de Economía.

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