The evolution of spanish total factor productivity since the global financial crisis

Chenxu Fu () and Enrique Moral-Benito
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Chenxu Fu: CEMFI

No 1808, Occasional Papers from Banco de España

Abstract: Total factor productivity (TFP) is considered the key determinant of long-term and sustainable economic growth. The dismal evolution of TFP characterized the Spanish economy since the foundation of the Eurozone until the outbreak of the Global Financial Crisis [see García- Santana et al. (2016)]. This article provides an anatomy of the recent evolution of Spanish TFP using both aggregate- and micro-level data available until 2016. Three conclusions emerge from our findings: i) while TFP growth remained subdued during the crisis, a TFP revival is taking place over the last years; ii) this pattern is mostly driven by the rise and fall of the capital-to-labor ratio (capital deepening) while the role of labor productivity is more muted, and iii) an across-the-board increase in firms’ capital-to-labor ratios accounts for most of the TFP decline during the first years of the crisis, while the subsequent TFP revival is explained by the reallocation of resources towards firms with low capital deepening.

Keywords: Spain; firm level data; TFP; misallocation. (search for similar items in EconPapers)
JEL-codes: D24 E44 G21 L25 O11 O47 (search for similar items in EconPapers)
Pages: 33 pages
Date: 2018-10
New Economics Papers: this item is included in nep-eec, nep-eff, nep-mac and nep-sbm
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

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