Heavyweights – The Impact of Large Businesses on Productivity Growth

Oliver Falck

No 2135, CESifo Working Paper Series from CESifo

Abstract: The idea of an industrial policy that promotes large businesses—heavyweights—as the best way to compete in a globalized world has become, again, en vogue among European politicians. The only apparent controversy about the idea revolves around whether it is better to promote national champions or, instead, European champions. Empirical evidence on the issue is rare and contradictory. A uniquely rich industry-level dataset for Germany is used in this paper to test whether large business size in an industry fosters growth in terms of total factor productivity (TFP). The results suggest that the overall effects of firm size on TFP growth are negative.

Keywords: firm size; productivity growth; total factor productivity; innovation (search for similar items in EconPapers)
Date: 2007
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Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_2135

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