European Competitiveness: A Semi-Parametric Stochastic Metafrontier Analysis at the Firm Level

National Bank of Belgium Working Paper No. 261

147 Pages Posted: 30 Jul 2014

See all articles by Michel Dumont

Michel Dumont

affiliation not provided to SSRN

Bruno Merlevede

Ghent University - Department of General Economics

Glenn Rayp

Ghent University - Department of General Economics

Marijn Verschelde

Ghent University

Date Written: July 2014

Abstract

In this paper a semiparametric stochastic metafrontier approach is used to obtain insight into firm level competitiveness in Europe. We differ from standard TFP studies at the firm level as we simultaneously allow for inefficiency, noise and do not impose a functional form on the input-output relation. Using AMADEUS firm-level data covering 10 manufacturing sectors from seven EU15 countries, (i) we document substantial, persistent differences in competitiveness (with Belgium and Germany as benchmark countries and Spain lagging behind) and a wide technology gap, (ii) we confirm the absence of convergence in TFP between the seven selected countries, (iii) we confirm that the technology gap is more pronounced for smaller firms, (iv) we highlight the role of post-entry growth for competitiveness.

Keywords: competitiveness, cross-country analysis, firm heterogeneity, total factor productivity, post-entry growth

JEL Classification: C14, D24, L25, M13, O33

Suggested Citation

Dumont, Michel and Merlevede, Bruno and Rayp, Glenn and Verschelde, Marijn, European Competitiveness: A Semi-Parametric Stochastic Metafrontier Analysis at the Firm Level (July 2014). National Bank of Belgium Working Paper No. 261, Available at SSRN: https://ssrn.com/abstract=2473091 or http://dx.doi.org/10.2139/ssrn.2473091

Michel Dumont (Contact Author)

affiliation not provided to SSRN

Bruno Merlevede

Ghent University - Department of General Economics ( email )

Tweekerkenstraat 2
Ghent, 9000
Belgium

Glenn Rayp

Ghent University - Department of General Economics ( email )

Hoveniersberg 24
Ghent, 9000
Belgium
32-9-2643495 (Phone)

Marijn Verschelde

Ghent University ( email )

Coupure Links 653
Gent, 9000
Belgium

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