Multifactor productivity growth enhancers across industries and countries: firm-level evidence

Ryota Nakatani

Eurasian Business Review, 2024, vol. 14, issue 2, No 4, 446 pages

Abstract: Abstract Multifactor productivity (MFP) growth is an imperative economic engine. MFP dynamism across five advanced and seven developing countries from 1996 to 2015 is analyzed, elucidating its association with financing and intangible assets. Debt is manifested by its inverted U-shaped nonlinear relationship with MFP advancement, while corporate cash holdings are negatively (positively) associated with MFP development in five (three) countries. The heterogeneous relationships between intangible assets and MFP growth are identified across industries, countries, and time; intangible assets are requisite MFP growth enhancers for manufacturing in developing countries, for service businesses in advanced countries, and for the period after the global financial crisis. The greater the productivity effect of intangible assets is, the higher a country’s per-capita income and/or governance quality becomes. Additionally, the results evince the catching-up of MFP to the technological frontier. Moreover, older firms exhibit slower MFP growth than their peers, whilst the positive effects of firm size on MFP growth are larger in high-tech and knowledge-intensive industries.

Keywords: Industrial analysis; Multifactor productivity growth; Cash holding; Debt financing; Knowledge and technology intensive sectors; Intangible assets (search for similar items in EconPapers)
JEL-codes: D22 D24 D25 G32 L25 L6 L8 M21 O34 O57 (search for similar items in EconPapers)
Date: 2024
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DOI: 10.1007/s40821-024-00265-8

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