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Heavyweights – The Impact of Large Businesses on Productivity Growth

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  • Oliver Falck

Abstract

The idea of an industrial policy that promotes large businesses—heavyweights—as the best way to compete in a globalized world has become, again, en vogue among European politicians. The only apparent controversy about the idea revolves around whether it is better to promote national champions or, instead, European champions. Empirical evidence on the issue is rare and contradictory. A uniquely rich industry-level dataset for Germany is used in this paper to test whether large business size in an industry fosters growth in terms of total factor productivity (TFP). The results suggest that the overall effects of firm size on TFP growth are negative.

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Bibliographic Info

Paper provided by CESifo Group Munich in its series CESifo Working Paper Series with number 2135.

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Date of creation: 2007
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Handle: RePEc:ces:ceswps:_2135

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Related research

Keywords: firm size; productivity growth; total factor productivity; innovation;

References

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  1. Arellano, Manuel & Bond, Stephen, 1991. "Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations," Review of Economic Studies, Wiley Blackwell, vol. 58(2), pages 277-97, April.
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