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Human capital, firm capabilities and productivity growth

Author

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  • Ilke Van Beveren

    () (Lessius Department of Business Studies, KU Leuven)

  • Stijn Vanormelingen

    (HU Brussels, KU Leuven)

Abstract

This paper determines the relative importance of technical efficiency and reallocation for aggregate productivity growth in a small open European economy. To this end we use a dataset containing all Belgian firms active in the private sector, both services and manufacturing. We observe at the firm level a number of factors that have been shown to be drivers of productivity differences across firms. More precisely, we have information on human capital such as the level of education and the amount of on-the-job training received by the employees. Moreover we observe the international activities of the firms such as imports and exports. This allows us to make a careful analysis of the micro foundations of aggregate productivity growth by applying the decomposition introduced by Petrin and Levinsohn (2012). The outcome of this exercise will not only provide us with a better understanding of the slowdown of productivity growth in Europe over the past decades, but also give an indication on the role of different productivity drivers in this process.

Suggested Citation

  • Ilke Van Beveren & Stijn Vanormelingen, 2014. "Human capital, firm capabilities and productivity growth," Working Paper Research 257, National Bank of Belgium.
  • Handle: RePEc:nbb:reswpp:201405-257
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    2. László Halpern & Miklós Koren & Adam Szeidl, 2015. "Imported Inputs and Productivity," American Economic Review, American Economic Association, vol. 105(12), pages 3660-3703, December.
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    4. Marc J. Melitz, 2003. "The Impact of Trade on Intra-Industry Reallocations and Aggregate Industry Productivity," Econometrica, Econometric Society, vol. 71(6), pages 1695-1725, November.
    5. Amil Petrin & Jerome Reiter & Kirk White, 2011. "The Impact of Plant-level Resource Reallocations and Technical Progress on U.S. Macroeconomic Growth," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 14(1), pages 3-26, January.
    6. Lucia Foster & John Haltiwanger & C.J. Krizan, 2002. "The Link Between Aggregate and Micro Productivity Growth: Evidence from Retail Trade," NBER Working Papers 9120, National Bureau of Economic Research, Inc.
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    More about this item

    Keywords

    Productivity; Productivity Decomposition;

    JEL classification:

    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models

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