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Cyclical and structural variation in resource allocation: evidence for Europe

Author

Listed:
  • Bartelsman, Eric
  • Lopez-Garcia, Paloma
  • Presidente, Giorgio

Abstract

This paper uses cross-country micro-aggregated data on firm dynamics and productivity from the ECB CompNet database to provide empirical evidence on factor reallocation in the European Union (EU). The analysis finds that reallocation is towards more productive firms although the magnitude varies across countries and over time. Variation in reallocation is related to structural differences in firm size distribution across countries as well as to variation in labor and product market institutions. Productivity-enhancing reallocation generally rises in downturns but, similar to findings for the US, it did not pick up in the Great Recession. The sharp drop in exports and tightness in credit markets are seen to provide a partial explanation for this lack of a silver lining. JEL Classification: E24, E32, J63, O4

Suggested Citation

  • Bartelsman, Eric & Lopez-Garcia, Paloma & Presidente, Giorgio, 2018. "Cyclical and structural variation in resource allocation: evidence for Europe," Working Paper Series 2210, European Central Bank.
  • Handle: RePEc:ecb:ecbwps:20182210
    Note: 2648086
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    File URL: https://www.ecb.europa.eu//pub/pdf/scpwps/ecb.wp2210.en.pdf
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    References listed on IDEAS

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    1. repec:hal:wpaper:halshs-03049459 is not listed on IDEAS
    2. Thomas Grebel & Mauro Napoletano & Lionel Nesta, 2020. "Distant but Close in Sight. Firm-level Evidence on French-German Productivity Gaps in Manufacturing," GREDEG Working Papers 2020-50, Groupe de REcherche en Droit, Economie, Gestion (GREDEG CNRS), Université Côte d'Azur, France.

    More about this item

    Keywords

    factor reallocation; Great Recession;

    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • J63 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Turnover; Vacancies; Layoffs
    • O4 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity

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