Understanding Competitiveness

Crespo, Aranzazu; Segura-Cayuela, Ruben
Authors registered in the RePEc Author Service: Ruben Segura-Cayuela () and Aranzazu Crespo

No MWP2014/20, Economics Working Papers from European University Institute

Abstract: Using firm level data, we analyse the factors that drive the evolution of the aggregate Unit Labor Costs – the main European competitiveness indicator – in France, Germany, Italy and Spain. The evolution of the aggregate Unit Labor Cost is not driven by the evolution of the firm level Unit Labor Costs, but rather by an important factor for the competitiveness of a country: the reallocation of resources among the firms of the economy. Using the methodology of Hsieh and Klenow (2009), we show the importance of an efficient allocation of resources for productivity gains.

Keywords: Unit labour costs; Competitiveness; Misallocation; European Union (search for similar items in EconPapers)
JEL-codes: F02 F15 J30 O47 O57 (search for similar items in EconPapers)
Date: 2014
New Economics Papers: this item is included in nep-bec, nep-cse and nep-eff
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (16)

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