Small and vulnerable: SME productivity in the great productivity slowdown

Sophia Chen and Do Lee

Journal of Financial Economics, 2023, vol. 147, issue 1, 49-74

Abstract: We show that the TFP growth of European micro, small, and medium-sized firms (SMEs) diverged from large firms after the global financial crisis. The average postcrisis TFP growth of medium-sized, small, and micro firms was, respectively, 1.1, 2.9, and 5.4 percentage points lower than that of large firms. This SME productivity gap is larger for firms with more severe credit supply shocks. The gap is partially attributable to a larger postcrisis reduction in intangible capital at SMEs than at large firms. Horseraces suggest that SME indicators are more robust and more powerful predictors of postcrisis TFP growth than other indicators.

Keywords: Credit constraint; Global financial crisis; Productivity; Intangible capital; SME (search for similar items in EconPapers)
JEL-codes: E22 G32 L11 O30 O47 (search for similar items in EconPapers)
Date: 2023
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Citations: View citations in EconPapers (6)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jfinec:v:147:y:2023:i:1:p:49-74

DOI: 10.1016/j.jfineco.2022.09.007

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