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Firm behavior, market deregulation and productivity in Spain

Author

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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.

Suggested Citation

  • César Alonso-Borrego, 2010. "Firm behavior, market deregulation and productivity in Spain," Working Papers 1035, Banco de España;Working Papers Homepage.
  • Handle: RePEc:bde:wpaper:1035
    as

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    File URL: http://www.bde.es/f/webbde/SES/Secciones/Publicaciones/PublicacionesSeriadas/DocumentosTrabajo/10/Fic/dt1035e.pdf
    File Function: First version, November 2010
    Download Restriction: no

    References listed on IDEAS

    as
    1. Ilke Van Beveren, 2012. "Total Factor Productivity Estimation: A Practical Review," Journal of Economic Surveys, Wiley Blackwell, vol. 26(1), pages 98-128, February.
    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 241-264, June.
    Full references (including those not matched with items on IDEAS)

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    Cited by:

    1. Juan J. Dolado & Salvador Ortigueira & Rodolfo Stucchi, 2016. "Does dual employment protection affect TFP? Evidence from Spanish manufacturing firms," SERIEs: Journal of the Spanish Economic Association, Springer;Spanish Economic Association, vol. 7(4), pages 421-459, November.
    2. Rizov, Marian & Davidova, Sophia & Bailey, Alastair, 2017. "Employment effects of CAP payments in the UK non-farm economy," Lincoln Economics and Finance Agecon Working Papers 268008, University of Lincoln, Lincoln International Business School.
    3. Nicodemo, Catia, 2013. "Immigration and Labor Productivity: New Empirical Evidence for Spain," IZA Discussion Papers 7297, Institute for the Study of Labor (IZA).

    More about this item

    Keywords

    TFP; Competition; Employment composition; Endogeneity;

    JEL classification:

    • L10 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - General
    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure
    • L23 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Organization of Production
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models

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