Monday, 20 August 2018

Competition and firm productivity

Using data on Portuguese firms this new working paper looks at the relationship between competition and firm productivity. And, not too surprisingly, finds a positive relationship between competition and both total factor productivity and labour productivity.

Competition and Firm Productivity: Evidence from Portugal

Pedro Carvalho
Abstract:
This paper presents empirical evidence on the impact of competition on firm productivity for the Portuguese economy. To that effect, firm-level panel data comprising information between 2010 and 2015 gathered from the Integrated Business Accounts System (Portuguese acronym: SCIE) is used. The database enables the construction of economic and financial indicators, which allow for isolating the impact of competition on firm-level productivity. We find a positive relationship between competition and both total factor productivity and labor productivity. This relationship is found to be robust to different specifications and in accordance with the results in the literature obtained for other countries.
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1 comment:

  1. Donal Curtin21 August 2018 at 09:11

    The Portuguese seem to be making good use of their business database, don't they?

    Here's something I wrote where some other Portuguese researchers looked at how increased competition (arising from a deregulation which made business formation easier) had other benefits, too, in this case on the gender pay gap

    http://economicsnz.blogspot.com/2018/05/how-competition-benefits-womens-pay.html

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