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Decomposing differences in total factor productivity across firm size

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Author Info

  • Laia Castany

    ()
    (Grup de Recerca d'Anàlisi Quantitativa Regional (AQR), Institut de Recerca en Economia Aplicada (IREA), Universitat de Barcelona)

  • Enrique López-Bazo

    ()
    (Grup de Recerca d'Anàlisi Quantitativa Regional (AQR), Institut de Recerca en Economia Aplicada (IREA), Departament d'Econometria, Estadística i Economia Espanyola, Universitat de Barcelona)

  • Rosina Moreno

    ()
    (Grup de Recerca d'Anàlisi Quantitativa Regional (AQR), Institut de Recerca en Economia Aplicada (IREA), Departament d'Econometria, Estadística i Economia Espanyola, Universitat de Barcelona)

Abstract

This paper investigates the extent to which the gap in total factor productivity between small and large firms is due to differences in the endowment of factors determining productivity and to the returns associated with these factors. We place particular emphasis on the contribution of differences in the propensity to innovate and in the use of skilled labor across firms of different size. Empirical evidence from a representative sample of Spanish manufacturing firms corroborates that both differences in endowments and returns to innovation and skilled labor significantly contribute to the productivity gap between small and large firms. In addition, it is observed that the contribution of innovation to this gap is caused only by differences in quantity, while differences in returns have no effect; in the case of human capital, however, most of the effect can be attributed to increasing differences in returns between small and large firms.

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File URL: http://www.pcb.ub.es/xreap/aplicacio/fitxers/XREAP2007-01.pdf
File Function: First version, 2007
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File URL: http://www.pcb.ub.es/xreap/aplicacio/fitxers/XREAP2007-01.pdf
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Bibliographic Info

Paper provided by Xarxa de Referència en Economia Aplicada (XREAP) in its series Working Papers with number XREAP2007-01.

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Length: 29 pages
Date of creation: Mar 2007
Date of revision: Mar 2007
Handle: RePEc:xrp:wpaper:xreap2007-01

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Postal: Espai de Recerca en Economia, Facultat de Ciències Econòmiques i Empresarials, Universitat de Barcelona, c/ Tinent Coronel Valenzuela, 1-11, 08034 Barcelona
Phone: +34+934039653
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Web page: http://www.pcb.ub.edu/xreap
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Keywords: Total Factor Productivity; skilled labor; innovation; firm size; Oaxaca decomposition;

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References

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Cited by:
  1. Lluís Bermúdez & Antoni Ferri & Montse Guillén, 2011. "A correlation sensitivity analysis of non-life underwriting risk in solvency capital requirement estimation," IREA Working Papers 201113, University of Barcelona, Research Institute of Applied Economics, revised Sep 2011.
  2. Michael Artis & Ernest Miguélez & Rosina Moreno, 2009. "Assessing agglomeration economies in a spatial framework with endogenous regressors," LSE Research Online Documents on Economics 33239, London School of Economics and Political Science, LSE Library.
  3. Ana Maria Osorio & Catalina Bolancé & Nyovani Madise, 2012. "Intermediary and structural determinants of early childhood health in Colombia: exploring the role of communities," Working Papers XREAP2012-13, Xarxa de Referència en Economia Aplicada (XREAP), revised Jun 2012.
  4. Esther Goya & Esther Vayá & Jordi Suriñach, 2011. "Productivity and innovation spillovers: Micro evidence from Spain," IREA Working Papers 201126, University of Barcelona, Research Institute of Applied Economics, revised Dec 2011.
  5. Antoni Ferri & Montserrat Guillén & Lluís Bermúdez, 2012. "Solvency Capital estimation and Risk Measures," Working Papers XREAP2012-02, Xarxa de Referència en Economia Aplicada (XREAP), revised Jan 2012.
  6. Laia Castany, 2008. "The Role of Firm Size in Training Provision Decisions: evidence from Spain," Economics of Education Working Paper Series 0028, University of Zurich, Institute for Strategy and Business Economics (ISU).
  7. Juan Luis Jiménez & Jordi Perdiguero & Ancor Suárez, 2011. "Debating as a classroom tool for adapting learning outcomes to the European higher education area," IREA Working Papers 201109, University of Barcelona, Research Institute of Applied Economics, revised Jun 2011.
  8. Vicente Royuela, 2012. "What about people in European Regional Science?," Working Papers XREAP2012-12, Xarxa de Referència en Economia Aplicada (XREAP), revised May 2012.
  9. David Castells & Vicente Royuela, 2011. "Agglomeration, Inequality and Economic Growth," IREA Working Papers 201114, University of Barcelona, Research Institute of Applied Economics, revised Apr 2012.
  10. Santosh Kumar Sahu & Krishnan Narayanan, 2011. "Total Factor Productivity and Energy Intensity in Indian Manufacturing: A Cross-Sectional Study," International Journal of Energy Economics and Policy, Econjournals, vol. 1(2), pages 47-58, September.
  11. Miguel Santolino & Catalina Bolancé & Manuela Alcañiz, 2011. "Factors affecting hospital admission and recovery stay duration of in-patient motor victims in Spain," IREA Working Papers 201119, University of Barcelona, Research Institute of Applied Economics, revised Oct 2011.
  12. Guglielmo D’Amico & Montserrat Guillen & Raimondo Manca, 2012. "Discrete time Non-homogeneous Semi-Markov Processes applied to Models for Disability Insurance," Working Papers XREAP2012-05, Xarxa de Referència en Economia Aplicada (XREAP), revised Mar 2012.
  13. Germà Bel & Xavier Fageda & Melania Mur, 2011. "Why do municipalities cooperate to provide local public services? An empirical analysis," IREA Working Papers 201118, University of Barcelona, Research Institute of Applied Economics, revised Oct 2011.
  14. Jordi Perdiguero, 2011. "Vertical relations and local competition: an empirical approach," IREA Working Papers 201124, University of Barcelona, Research Institute of Applied Economics, revised Dec 2011.
  15. Ernest Miguele & Rosina Moreno, 2012. "Do labour mobility and networks foster geographical knowledge diffusion? The case of European regions," Working Papers XREAP2012-14, Xarxa de Referència en Economia Aplicada (XREAP), revised Jul 2012.
  16. Eva Boj & Pedro Delicado & Josep Fortiana & Anna Esteve & Adria Caballe, 2012. "Local Distance-Based Generalized Linear Models using the dbstats package for R," Working Papers XREAP2012-11, Xarxa de Referència en Economia Aplicada (XREAP), revised May 2012.
  17. Laia Castany, 2008. "The Role of Firm Size in Training Provision Decisions: evidence from Spain," IREA Working Papers 200808, University of Barcelona, Research Institute of Applied Economics, revised Jun 2008.
  18. Ana María Osorio & Catalina Bolancé & Manuela Alcañiz, 2011. "Measuring early childhood health: a composite index comparing Colombian departments," IREA Working Papers 201122, University of Barcelona, Research Institute of Applied Economics, revised Oct 2011.

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