In Germany, the productivity of professional services, a sector dominated by micro and small firms, declined by 40 percent between 1995 and 2014. This productivity decline also holds true for professional services in other European countries. Using a German firm-level dataset of 700,000...

This paper examines the relationship between firm size and productivity. In contrast to previous studies, this paper offers evidence of the relationship not only from manufacturing firms, but from non-manufacturing firms as well. Furthermore, the aggregate importance of the firm sizeproductivity...

Nishimura, Nakajima, and Kiyota (2005) analyze the entry/exit behavior patterns of Japanese firms during the 1990s and find that relatively efficient (high total factor productivity (TFP)) firms exited while relatively inefficient (low TFP) firms survived during the banking-crisis period of...

The productivity slowdown has been analysed as an effect of weaker technological progress, of the digital economy or of a less efficient reallocation process. Using data on firms operating in France, we highlight that, at the technological frontier, productivity has accelerated, especially over...

Producing high-quality products incurs higher costs but provides greater consumption benefits, placing a challenge in measuring firm capability when output quality differs. Using a unique panel that contains a direct measure of scientific output quality, we introduce a quality-adjusted...

Measures of institutional quality are strong predictors of cross-country differences in income and productivity. The institutional economics literature has long maintained that one way institutions influence economic growth is by impacting the efficient allocation of production factors across...

Factor misallocation has been emphasized as one of the main sources of differences in aggregate TFP. This paper investigates the empirical dynamics of both capital and labor misallocation. Exploiting a balanced firm-level panel dataset covering manufacturing and services industries in several...

With non-homothetic preferences, a monopolistic competition equilibrium is inefficient. In a setting with heterogeneous firms that charge variable markups, this paper finds a sufficient statistic for changes in allocative efficiency that can be directly measured with data. The model also...

Markups vary systematically across firms and are an important cause of productivity dispersion. However, whether markup dispersion represents mis-allocation depends on sources driving the dispersion. This paper provides evidence on the role of demand-side factors in shaping the dispersion of...

With non-homothetic preferences, a monopolistic competition equilibrium is inefficient in the way inputs are allocated towards production. This paper quantifies a gains from trade component that is present only when reallocation is properly measured in a setting with heterogeneous firms that...