Laia Castany () (Faculty of Economics, University of Barcelona) Enrique Lopez-Bazo () (Faculty of Economics, University of Barcelona) Rosina Moreno () (Faculty of Economics, University of Barcelona)
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Empirical evidence is compelling that large firms are more productive than small firms. The hypothesis in this paper is that the productivity differences between small and large firms are associated with two of the main determinants of a firm’s performance: the human and technological capital that firms incorporate. We suggest that the contribution of these factors in explaining the size of the productivity gap might not only be due to the fact that large firms make a more extensive use of them, but also because large firms obtain higher returns from their investment in human and technological capital. The evidence we obtain for a comprehensive sample of Spanish manufacturing firms (1990-2002) supports this hypothesis, which has important implications for the effectiveness of policies designed to improve productivity in SMEs by stimulating innovation and the use of more skilled workers.
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Paper provided by University of Barcelona, Research Institute of Applied Economics in its series IREA Working Papers with number
200716.
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