Cross your border and look around

This document focuses on innovation, human capital, technology transfers and competition as potential sources of productivity growth for firms. It integrates the views of existing literature such as the two faces of R&D, the convergence debate and the existence of firm-level heterogeneity in productivity. Using firm-level data of 127 industries in the Netherlands, the document analyses which determinants are most relevant for a catch up to the global frontier and in that respect are important for the productivity performance of firms. Moreover, the document takes into account the potential importance of a national frontier. The frontier is defined as the highest productivity level at the national or global level respectively. The document provides econometric evidence that technology transfers matter, predominantly from the national frontier. Particularly, R&D encourages growth through technology transfers from the national frontier. This suggests that firms mainly conduct R&D in order to adopt existing technologies from other (domestic) firms. Competition on Dutch markets plays a role in productivity growth as well. Finally, human capital also seems to affect productivity growth.