Firms’ distance to the European productivity frontier

Dolores Añón Higón (), Juan A. Mañez, María E. Rochina-Barrachina (), Amparo Sanchis-Llopis and Juan A. Sanchis ()
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Dolores Añón Higón: Faculty of Economics (Universitat de València)
María E. Rochina-Barrachina: Faculty of Economics (Universitat de València)
Juan A. Sanchis: Faculty of Economics (Universitat de València)
Authors registered in the RePEc Author Service: Maria Engracia Rochina Barrachina

Eurasian Business Review, 2022, vol. 12, issue 2, No 1, 197-228

Abstract: Abstract In this article we explore the factors contributing to reduce the distance of laggard firms to the European frontier, focusing on institutional factors. To characterize Total Factor Productivity frontier firms within industries for the European Union we use firm level data from AMADEUS for the period 2003–2014. Our findings provide evidence on the importance of governance quality and easiness in getting credit in explaining the distance of laggard firms to the European productivity frontier. We also find that other factors at the country level -tertiary education, R&D stock, and trade openness- and at the firm level -size, age, and capital-intensity- influence the distance of laggards to the frontier. In addition, we examine the role of the Great Recession in moderating the contribution of all these factors to reduce firms’ distance to the European productivity frontier.

Keywords: Total Factor Productivity; Frontier firms; Laggard firms; Institutional factors; Great Recession; European Union countries (search for similar items in EconPapers)
JEL-codes: D24 O47 O52 (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (1)

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DOI: 10.1007/s40821-022-00207-2

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