IDEAS home Printed from https://ideas.repec.org/p/pra/mprapa/116672.html
   My bibliography  Save this paper

Patterns of Firm-Level Productivity in Ireland

Author

Listed:
  • Papa, Javier
  • Rehill, Luke
  • OConnor, Brendan

Abstract

Although Ireland is a high productivity country, it has not been immune from the global productivity slowdown, with the pace of growth on a downward trend throughout the 2000s. To identify the determinants behind the aggregate productivity growth in Ireland we use a firm-level panel dataset from the CSO to study productivity patterns and trends distributed by percentile, sector, ownership, as well the efficiency of resource allocation. Our results show a widening of the productivity gap between the most and least productive firms, consistent with cross-country results from the OECD. Results also confirm that aggregate productivity statistics are heavily dominated by a small number of foreign owned firms, leaving Ireland’s productivity prone to firm-specific shocks, while also disguising the performance of domestic sectors and firms. Lastly, allocative efficiency, a key driver of productivity, does not appear particularly strong amongst domestic sectors of the economy.

Suggested Citation

  • Papa, Javier & Rehill, Luke & OConnor, Brendan, 2021. "Patterns of Firm-Level Productivity in Ireland," MPRA Paper 116672, University Library of Munich, Germany, revised 2021.
    • Handle: RePEc:pra:mprapa:116672
    as

    Download full text from publisher

    File URL: https://mpra.ub.uni-muenchen.de/116672/1/MPRA_paper_116672.pdf
    File Function: original version
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Giovanni Dosi & Sébastien Lechevalier & Angelo Secchi, 2010. "Interfirm heterogeneity: nature, sources and consequences for industrial dynamics. An introduction," Post-Print hal-00642680, HAL.
    2. Eric Bartelsman & John Haltiwanger & Stefano Scarpetta, 2009. "Measuring and Analyzing Cross-country Differences in Firm Dynamics," NBER Chapters, in: Producer Dynamics: New Evidence from Micro Data, pages 15-76, National Bureau of Economic Research, Inc.
    3. Marc J. Melitz & Sašo Polanec, 2015. "Dynamic Olley-Pakes productivity decomposition with entry and exit," RAND Journal of Economics, RAND Corporation, vol. 46(2), pages 362-375, June.
    4. Xavier Gabaix, 2011. "The Granular Origins of Aggregate Fluctuations," Econometrica, Econometric Society, vol. 79(3), pages 733-772, May.
    5. Dan Andrews & Chiara Criscuolo & Peter N. Gal, 2015. "Frontier Firms, Technology Diffusion and Public Policy: Micro Evidence from OECD Countries," OECD Productivity Working Papers 2, OECD Publishing.
    6. Giuseppe Berlingieri & Sara Calligaris & Chiara Criscuolo, 2018. "The Productivity-Wage Premium: Does Size Still Matter in a Service Economy?," AEA Papers and Proceedings, American Economic Association, vol. 108, pages 328-333, May.
    7. De Long, J Bradford, 1988. "Productivity Growth, Convergence, and Welfare: Comment," American Economic Review, American Economic Association, vol. 78(5), pages 1138-1154, December.
    8. Olley, G Steven & Pakes, Ariel, 1996. "The Dynamics of Productivity in the Telecommunications Equipment Industry," Econometrica, Econometric Society, vol. 64(6), pages 1263-1297, November.
    9. Giovanni Dosi & Sébastien Lechevalier & Angelo Secchi, 2010. "Introduction: Interfirm heterogeneity--nature, sources and consequences for industrial dynamics," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 19(6), pages 1867-1890, December.
    10. Charles R. Hulten & Edwin R. Dean & Michael J. Harper, 2001. "New Developments in Productivity Analysis," NBER Books, National Bureau of Economic Research, Inc, number hult01-1, May.
    11. Boyan Jovanovic, 1987. "Micro Shocks and Aggregate Risk," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 102(2), pages 395-409.
    12. Steven N. Durlauf, 1993. "Nonergodic Economic Growth," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 60(2), pages 349-366.
    13. Chad Syverson, 2004. "Product Substitutability and Productivity Dispersion," The Review of Economics and Statistics, MIT Press, vol. 86(2), pages 534-550, May.
    14. Robert E. Hall & Charles I. Jones, 1999. "Why do Some Countries Produce So Much More Output Per Worker than Others?," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 114(1), pages 83-116.
    15. James Levinsohn & Amil Petrin, 2003. "Estimating Production Functions Using Inputs to Control for Unobservables," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 70(2), pages 317-341.
    16. Peter N. Gal, 2013. "Measuring Total Factor Productivity at the Firm Level using OECD-ORBIS," OECD Economics Department Working Papers 1049, OECD Publishing.
    17. Wooldridge, Jeffrey M., 2009. "On estimating firm-level production functions using proxy variables to control for unobservables," Economics Letters, Elsevier, vol. 104(3), pages 112-114, September.
    18. Stéphane Sorbe & Peter Gal & Valentine Millot, 2018. "Can productivity still grow in service-based economies?: Literature overview and preliminary evidence from OECD countries," OECD Economics Department Working Papers 1531, OECD Publishing.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Zheng, Guanyu & Duy, Hoang Minh & Pacheco, Gail, 2021. "Benchmarking New Zealand's frontier firms," IWH-CompNet Discussion Papers 1/2021, Halle Institute for Economic Research (IWH).
    2. Papa, Javier, 2018. "NCC Productivity Statement 2018," MPRA Paper 116680, University Library of Munich, Germany.
    3. Guanyu Zheng & Hoang Minh Duy & Gail Pacheco, 2021. "Benchmarking the Productivity Performance of New Zealand’s Frontier Firms," International Productivity Monitor, Centre for the Study of Living Standards, vol. 40, pages 27-55, Spring.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. J. David Brown & Gustavo A. Crespi & Leonardo Iacovone & Luca Marcolin, 2018. "Decomposing firm-level productivity growth and assessing its determinants: evidence from the Americas," The Journal of Technology Transfer, Springer, vol. 43(6), pages 1571-1606, December.
    2. Criscuolo, Chiara & Andrews, Dan & Gal, Peter N., 2019. "The best versus the rest: divergence across firms during the global productivity slowdown," LSE Research Online Documents on Economics 103405, London School of Economics and Political Science, LSE Library.
    3. Themann, Michael & Koch, Nicolas, 2021. "Catching up and falling behind: Cross-country evidence on the impact of the EU ETS on firm productivity," Ruhr Economic Papers 904, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
    4. Massimo Del Gatto & Adriana Di Liberto & Carmelo Petraglia, 2011. "Measuring Productivity," Journal of Economic Surveys, Wiley Blackwell, vol. 25(5), pages 952-1008, December.
    5. 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.
    6. Lionel Fontagné & Gianluca Santoni, 2015. "Firm Level Allocative Inefficiency: Evidence from France," Working Papers hal-01299818, HAL.
    7. Jeroen Van den bosch & Stijn Vanormelingen, 2023. "Productivity growth over the business cycle: cleansing effects of recessions," Small Business Economics, Springer, vol. 60(2), pages 639-657, February.
    8. Ettore Panetti, 2019. "The Economics of The European Deposit Insurance Scheme," Economic Bulletin and Financial Stability Report Articles and Banco de Portugal Economic Studies, Banco de Portugal, Economics and Research Department.
    9. Ryan A. Decker & John Haltiwanger & Ron S. Jarmin & Javier Miranda, 2018. "Changing Business Dynamism and Productivity : Shocks vs. Responsiveness," Finance and Economics Discussion Series 2018-007, Board of Governors of the Federal Reserve System (U.S.).
    10. Gareth Anderson & Mr. Mehdi Raissi, 2018. "Corporate Indebtedness and Low Productivity Growth of Italian Firms," IMF Working Papers 2018/033, International Monetary Fund.
    11. Peter Bauer & Igor Fedotenkov & Aurelien Genty & Issam Hallak & Peter Harasztosi & David Martinez Turegano & David Nguyen & Nadir Preziosi & Ana Rincon-Aznar & Miguel Sanchez Martinez, 2020. "Productivity in Europe: Trends and drivers in a service-based economy," JRC Research Reports JRC119785, Joint Research Centre.
    12. Gnocato, Nicolò & Modena, Francesca & Tomasi, Chiara, 2020. "Labor market reforms and allocative efficiency in Italy," Labour Economics, Elsevier, vol. 67(C).
    13. Berlingieri, Giuseppe & Blanchenay, Patrick & Criscuolo, Chiara, 2024. "The great divergence(s)," Research Policy, Elsevier, vol. 53(3).
    14. Claire Giordano, Paloma Lopez-Garcia, 2018. "Is corruption efficiency-enhancing? A case study of the Central and Eastern European region," European Journal of Comparative Economics, Cattaneo University (LIUC), vol. 15(1), pages 119-164, June.
    15. Orlic, Edvard & Hashi, Iraj & Hisarciklilar, Mehtap, 2018. "Cross sectoral FDI spillovers and their impact on manufacturing productivity," International Business Review, Elsevier, vol. 27(4), pages 777-796.
    16. Mahdi Ghodsi, 2020. "Is Austria’s economy locked-in in the CESEE region? Austria’s competitiveness at the micro-level," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 47(3), pages 669-693, August.
    17. Gregor Singer, 2024. "Complementary Inputs and Industrial Development: Can Lower Electricity Prices Improve Energy Efficiency?," CESifo Working Paper Series 10944, CESifo.
    18. Daan Freeman & Leon Bettendorf & Harro van Heuvelen & Gerdien Meijerink, 2021. "The contribution of business dynamics to productivity growth in the Netherlands," CPB Discussion Paper 427, CPB Netherlands Bureau for Economic Policy Analysis.
    19. Yılmaz Kılıçaslan & Robin C. Sickles & Aliye Atay Kayış & Yeşim Üçdoğruk Gürel, 2017. "Impact of ICT on the productivity of the firm: evidence from Turkish manufacturing," Journal of Productivity Analysis, Springer, vol. 47(3), pages 277-289, June.
    20. Escribano, Álvaro & Guasch, J. Luis & Pena, Jorge, 2019. "Investment Climate Effects on Alternative Firm-Level Productivity Measures," UC3M Working papers. Economics 28639, Universidad Carlos III de Madrid. Departamento de Economía.

    More about this item

    Keywords

    Productivity; Firm-Level; Heterogeneity; Market Concentration; Ireland;
    All these keywords.

    JEL classification:

    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • O38 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Government Policy
    • 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

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:116672. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Joachim Winter (email available below). General contact details of provider: https://edirc.repec.org/data/vfmunde.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.