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Micro-based evidence of EU competitiveness: The CompNet database

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  • CompNet Task Force

Abstract

Drawing from confidential firm-level balance sheets in 11 European countries, the paper presents a novel sectoral database of comparable productivity indicators built by members of the Competitiveness Research Network (CompNet) using a newly developed research infrastructure. Beyond aggregate information available from industry statistics of Eurostat or EU KLEMS, the paper provides information on the distribution of firms across several dimensions related to competitiveness, e.g. productivity and size. The database comprises so far 11 countries, with information for 58 sectors over the period 1995-2011. The paper documents the development of the new research infrastructure, the construction of the database, and shows some preliminary results. Among them, it shows that there is large heterogeneity in terms of firm productivity or size within narrowly defined industries in all countries. Productivity, and above all, size distribution are very skewed across countries, with a thick left-tail of low productive firms. Moreover, firms at both ends of the distribution show very different dynamics in terms of productivity and unit labour costs. Within-sector heterogeneity and productivity dispersion are positively correlated to aggregate productivity given the possibility of reallocating resources from less to more productive firms. To this extent, we show how allocative efficiency varies across countries, and more interestingly, over different periods of time. Finally, we apply the new database to illustrate the importance of productivity dispersion to explain aggregate trade results.

Suggested Citation

  • CompNet Task Force, 2014. "Micro-based evidence of EU competitiveness: The CompNet database," Working Paper Research 253, National Bank of Belgium.
  • Handle: RePEc:nbb:reswpp:201403-253
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    File URL: https://www.nbb.be/doc/oc/repec/reswpp/wp253en.pdf
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    References listed on IDEAS

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    1. Melitz, Marc J. & Redding, Stephen J., 2014. "Heterogeneous Firms and Trade," Handbook of International Economics, Elsevier.
    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. Haltiwanger, John, 2011. "Firm dynamics and productivity growth," EIB Papers 5/2011, European Investment Bank, Economics Department.
    4. Ackerberg, Daniel & Caves, Kevin & Frazer, Garth, 2006. "Structural identification of production functions," MPRA Paper 38349, University Library of Munich, Germany.
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    Cited by:

    1. repec:ecb:ecbops:2010161 is not listed on IDEAS
    2. Laurens Cherchye & Thomas Demuynck & Bram De Rock & Marijn Verschelde, 2018. "Nonparametric identification of unobserved technological heterogeneity in production," Working Paper Research 335, National Bank of Belgium.
    3. Marijn Verschelde & Michel Dumont & Bruno Merlevede & Glenn Rayp, 2014. "A constrained nonparametric regression analysis of factor-biased technical change and TFP growth at the firm level," Working Paper Research 266, National Bank of Belgium.
    4. Brian Micallef, 2016. "The Adjustment of Maltese Firms to the Post-crisis Economic Environment: Evidence from a Firm-level Survey," International Business Research, Canadian Center of Science and Education, vol. 9(9), pages 122-133, September.
    5. Bindseil, Ulrich & Domnick, Clemens & Zeuner, Jörg, 2015. "Critique of accommodating central bank policies and the 'expropriation of the saver' - A review," Occasional Paper Series 161, European Central Bank.

    More about this item

    Keywords

    cross country analysis; firm-level data; competitiveness; productivity and size distribution; total factor productivity; allocative efficiency;

    JEL classification:

    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • O4 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity
    • O57 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Comparative Studies of Countries

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