The Determinants of TFP Growth in the Portuguese Service Sector

Ana Martins (), Tiago Domingues () and Catarina Branco ()
Additional contact information
Ana Martins: GEE - Gabinete de Estratégia e Estudos do Ministério da Economia
Tiago Domingues: GEE - Gabinete de Estratégia e Estudos do Ministério da Economia
Catarina Branco: Nova School of Business and Economics

No 114, GEE Papers from Gabinete de Estratégia e Estudos, Ministério da Economia

Abstract: As services today are of great complexity and usually a bundle of different individual inputs, it is sometimes hard to identify characteristics for the overall service sector. As such, empirical research on productivity is less common in this sector. Given the connection between Total Factor Productivity (TFP) and economic growth, and the importance of services for overall economic activity, it is crucial to study, at the firm level, which factors may drive TFP growth in this particular sector. Our empirical assessment is based on a firm-level panel dataset covering Portuguese service firms, between 2010 and 2016. We first estimate TFP through the Levinsohn-Petrin (LP) algorithm and compare results amongst different traditional estimating methods. Secondly, we conclude our econometric framework with a fixed-effects estimation, hence, trying to shed further light on the determinants of TFP growth in the Portuguese service sector. We found evidence for a positive correlation between financial health, innovation, wage premium, and TFP growth, whereas capital intensity, training, and age show a non-linear relationship with TFP growth.

Keywords: Total Factor Productivity; LEVPET; Fixed e ects; Service Sector (search for similar items in EconPapers)
JEL-codes: C33 D22 D24 O47 (search for similar items in EconPapers)
Pages: 45 pages
Date: 2018-11, Revised 2018-11
New Economics Papers: this item is included in nep-eff, nep-sbm and nep-tid
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Published

Downloads: (external link)
https://www.gee.gov.pt//RePEc/WorkingPapers/GEE_PAPERS_114.pdf First version, 2018 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:mde:wpaper:0114

Access Statistics for this paper

More papers in GEE Papers from Gabinete de Estratégia e Estudos, Ministério da Economia Contact information at EDIRC.
Bibliographic data for series maintained by Joana Almodovar ().