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Firms’ distance to the European productivity frontier

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Firms’ distance to the European productivity frontier

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Añón Higón, Dolores; Máñez Castillejo, Juan Antonio; Rochina Barrachina, María Engracia; Sanchis llopis, Amparo; Sanchis Llopis, Juan Alberto

This document is a artículoDate2022

In this article we explore the factors contributing to reduce the distance of laggard frms to the European frontier, focusing on institutional factors. To characterize Total Factor Productivity frontier frms within industries for the European Union we use frm level data from AMADEUS for the period 2003–2014. Our fndings provide evidence on the importance of governance quality and easiness in getting credit in explaining the distance of laggard frms to the European productivity frontier. We also fnd that other factors at the country level -tertiary education, R&D stock, and trade openness- and at the frm level -size, age, and capital-intensity- infuence the distance of laggards to the frontier. In addition, we examine the role of the Great Recession in moderating the contribution of all these factors to reduce firms’ distance to the European productivity frontier.

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