Differences in Productivity and its Determinants Among Firms from the Czech Republic, Hungary, Poland and Germany : The Case of the Cosmetics Industry

The paper assesses differences in productivity and its determinants among enterprises manufacturing cosmetics and detergents (NACE 245) and located in Germany and in three EU new member states. The database collected through conducting an identical survey in Germany, Poland, Czech Republic and Hungary was used. The results of this firm-level study point on the role of the existence of 'dual economy' of some very highly and very low productive firms, especially among the small enterprises from the new member states. Productivity gap vis-a-vis Germany in this labour-intensive industry disappears in the case of some large enterprises from the CEECs. Generally, higher fixed capital intensity, higher investment rate, lower unit labour costs, more employees improving skills, and higher use of modern communication technology help in narrowing productivity gap. The paper ends with policy recommendations