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Raising EU Productivity: Lessons from Improved Micro Data

Deliverables

Effect of wage bargaining regimes on firms' employment adjustments

Analysing in a cross country setting how centralised wage bargaining regimes impact on the extent of employment adjustments and subsequent recovery in the aftermath of the 200809 crisis

1. Update PEDR

A thorough impact assessment of the strategys results will be done to evaluate and update the PEDR This will be the first update

Labour market institutions and trade shocks

Studying the adjustment process of the labour market and of industrial structures following a trade shock

Policy conclusions WP2

Summarising the most important policy lessons from the research undertaken related to globalisation and productivity A specific emphasis will be on the factors that affect which firms can integrate and benefit most from globalisation in general and GVCs in particular A particular focus is the role of intangibles and their interaction with the institutions in this As this WP builds strongly on survey data linked to financial data we will derive a number of conclusions on the uses and limitations of such data as well as formulate proposals on how to collect survey information on firm internationalisation and GVCs

R&D policies and productivity growth

Paper on the aggregate relation between RD and productivity growth

Methodological report on the creation of the new data

New data will be collected which will create the basis for the analysis of productivity dynamics

Analysis of the importance of intangible capital for productivity measurement

Exploring new methods of modelling production, taking into account the network structure of production chains as well as the increasing importance of intangible capital in the production.

Report on productivity and its development over time across European countries (and industries) using the new data

Delivery of harmonised cross country microaggregated data and experimental data products on productivity

Test cleansing effect of banking crises

Testing whether more restructuring in the banking sector during the great financial crisis led to better productivity growth after the crisis and whether rescuing weak banks caused survival of unproductive zombie firms

Tracking the real effects of asset purchase programs

Testing whether relaxing banks financial constraints by the ECB Securities Market Program causally affected employment growth investment sales and productivity of small and medium sized enterprises attached to affected banks

Automation and inequality in European Regions

Providing the first estimate of the potential impact of automation measured by robot adoption on the EU labour market

Industrial structure, trade shocks and inequality

Looking at how a trade shock impacts the distribution of firms’ productivity across EU regions and, from here, the wage dispersion and thus inequality.

Import competition and firm productivity

Understanding how firms can integrate into GVCs and what can they benefit from them. We use two approaches and datasets to investigate this question by conducting qualitative surveys, linked to financial data to measure ownership, ICT intensity and international activities in a number of countries; Using these data to investigate the factors usually identified as engine of productivity at the firm-level (size, organisation, technological capacity, access to credit), but also at the institutional macro-level (e.g. labour market regulations, education/skills availability, product market access).

Globalisation and Innovation

Analysing the effect of globalisation on RD product portfolio changes and patents

The formation of Business Groups

The study will investigate a key institution of the global economy the business group in a context where headquarterspecific knowledge and contractual incompleteness are both important In particular the paper will build a model of business group as knowledge based hierarchies and show that are more likely to arise in a better institutional environment

Policy Brief

This document includes a brief summaryconclusion of the activity of engagement with stakeholders with focus on those WPs where a certain level of maturity of work has been reached

Macro shock and productivity slowdown

Paper on the Impact of macro shocks on the productivity slowdown

Dissecting Global Value Chains: Evidence from the global automotive industry

Investigating how domesticallyowned firms can join value chains in a key industry the automotive sector Using a rich dataset on withincountry supplierbuyer links between firms linked to detailed international trade data we consider the role of different firm characteristics as well as the importance of foreign direct investment in this process

Analyse whether import competition improves allocative efficiency

Using harmonised data for European countries CompNet data we analyse whether import competition improves allocative efficiency

Skill-biased technological change and innovation: a micro level analysis

Looking at the role of skillbiased technological change in driving wage inequality from a micro perspective looking at individual workers and import and investment data for their employers to track the kind of machines acquired during the innovation process

Heterogeneous dynamics of productivity and EU Governance

Paper on the assessment of the economic governance framework

2. Update PEDR

A thorough impact assessment of the strategys results will be done to evaluate and update the PEDR This will be the second update

Occupational tasks, trade shocks and labour market adjustments

Examining the labour market effects of import competition in relation to transferability of human capital

Multi-product firms and import competition

Investigating how firms reallocate their product mix and how efficiency changes at the firmproduct level by using firmproductlevel data and deriving conclusions about productivity measurement issues when firms are multiproduct

Analysis of the importance of ICT and Productivity

Using a unique dataset from Statistics Denmark about IT spending for more than 3000 firms over 12 years to analyse the link between IT and productivity

Analysis of the importance of R&D and Productivity

Developing and appling a novel methodology to study the link between RD and productivity that jointly estimates production cost and demand functions for multiproduct firms using detailed firmproduct level dataset from Denmark

Fully-fledged PEDR for the project

A detailed PEDR, building on the draft dissemination and exploitation strategy developed in section 2.2 will be elaborated early on (Deliverable D7.1 at M4). A thorough impact assessment of the strategy’s results will be done to evaluate and update the PEDR at M16 (D7.2) and at M28 (D7.3).

Policy conclusions WP4

Summarising the most important policy lessons from the research undertaken related to factor relocation with a special focus on weak dynamism of European SMEs and startups Policy suggestions will relate to the side effects of unconventional monetary policy and the forbearance in bank restructuring for the survival of zombie firms and for employment growth and productivity of new SMEs Further policy implications will be derived regarding the consequences of labour market institutions and skill shortage for firm dynamism and suggestions will be formulated on which type of foreign competition is conducive for productivity maximising factor allocation

Portfolio of MICROPROD's working papers and scientific publications

portfolio of all MICROPRODs working papers and scientific publications published during the project

Global Value Chains localisation and firms competitiveness: Case studies on selected EU countries

Analysis of what kind of supplier-buyer relationships are associated with large productivity premia/learning as assessed by the firm. Is it necessary that the partner is foreign owned or is it more important that it is integrated into GVCs? Second, how relationships form? In particular, what kinds of networks are used to find partners and what type of investment or innovation is necessary to form relationships with globally integrated firms? Third, what kind of innovative activities take place within these relationships? How the nature of these activities is related to the characteristics of the partners?

Analysis of the importance of globalisation and fragmentation of production (GVCs) for productivity measurement

Exploring new methods of modelling production taking into account the network structure of production chains as well as the increasing importance of intangible capital in the production

The role of intangibles in organisational choices in GVCs

Infering the presence of intangible assets by studying whether the organisational decision of firms react to changes in the strength of intellectual property rights (IPR) protection.

Uncertainty and productivity slowdown

Paper on Uncertainty and its impact on investment

Resource misallocation and external competitiveness

Analysing two main channels through which globalisation and global competition may affect productivity via affecting within firmproductivity and reallocation across firms

Productivity slowdown and lower bound of interest rates

Paper on the impact on the socalled neutral interest rate of a fall in productivity

Analysis of the importance of financial friction for productivity measurement

Current methods will be extended and new methods will be developed to purge productivity from biases due to systematic firm heterogeneity

First Draft Handbook/guide for new measurement/data production

MICROPROD’s experimental approach with the Pilot NSIs will take the form of workshops, which we plan to hold at M3 and M9 at MTA KRTK and IWH. MICROPROD will eventually scale up to further NSIs, and in order to do so, we will be providing a Handbook (i.e. guide) for new measurement/data production.

Secular stagnation and the EU social model

Paper on policies to boost economic growth and cohesion

The formation and operation of supplier-buyer linkages

Analysing the role of ICT in getting integrated to GVCs We look at heterogeneities across technologies and also consider the potential role of complementarities between suppliers and buyers ICT in the mechanism

Policy conclusions WP3

Summarising the most important policy lessons from the research undertaken related to Innovation Digitalisation and Productivity Three main areas of policy will be addressed 1 policy that can contribute to the further development of innovation at the global frontier 2 growth policies are explored that support firmlevel innovative activities and adoption of frontier technology and 3 how these policies may interact with other social goals related to income distribution

Joint impact of product and labour market power on resource allocation

Using harmonised data for European countries CompNet data we analyse whether import competition improves allocative efficiency

Estimate the elasticity of bank credit with respect to productivity

Asking whether financial constraints causally affect the real economy.

Comparing firm-level patterns of ICT adoption and R&D investment with industry and aggregate patterns

Using the new data of heterogeneous firms their investments in ICT and their RD spending as developed in WP1 Descriptive statistics and straightforward analysis will compare and contrast these microfounded indicators with the industry and aggregatelevel data as provided by the EU KLEMS project We will describe the evolution over time of ICT investments and RD patterns and compare them across countries This work will be ongoing through the duration of MICROPROD with annual updates as new data become available and will provide evidence needed in WP6

Explore relationship between ‘skill shortage' and labour allocation

Linking balance sheet data with vacancy and wage data at the firm level we first ask how skill shortages impact on the efficient allocation of labour across heterogeneous firms

Policy contribution summarising the interim findings of the project

This deliverable will ompile the policyrelevant findings from WP1 to WP5 with a focus on those activities that have reached a certain level of maturity The main underlying objective is to summarise findings ahead of the last year of the project as well as in preparation to the 1st policy conference scheduled for M29

Portfolio of MICROPROD's policy papers and policy notes

a portfolio of all policy papers and notes published under the project

Policy conclusions WP5

Summarising the most important policy lessons from the research undertaken related to the impact of globalisation and technological changes on inequality and formulation of policy suggestions on how to best foster adequate changes in the industrial structure ensuing a globalisation shock also in terms of product and capital market regulations A specific section will be devoted to the discussion of the policy implications stemming from the analysis of the role of technology in fostering societal inequalities also in light of the consequences of the COVID shock

Data dissemination via CompNet I

Already existing infrastructure of CompNet will be used to make the data available to research and policy on yearly basis.

Data Management Plan (DMP)

In order to manage data aspect of the project, a Data Management Plan (DMP) is scheduled for Month 6, as part of WP1, led by Prof Filippo di Mauro (IWH). It will include a robust system and agreed rules clarifying data access, validation, quality and reliability, integration, storage and protection. The DMP will be elaborated in accordance with MICROPROD’s ethical principles (see section 5 of Annex 1 - Part B for more information).

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Publications

The productivity paradox: Policy lessons from MICROPROD

Author(s): Claeys, Gregory; Demertzis, Maria
Published in: Bruegel Policy Contribution, 01/2021, 2021
Publisher: Bruegel

Markups, intangible capital and heterogeneous financial frictions

Author(s): Carlo Altomonte, Domenico Favoino, Monica Morlacco, Tommaso Sonno
Published in: CEP Discussion Papers, 1740, 2021, ISSN 2042-2695
Publisher: London School of Economics and Political Science

Offshoring, domestic employment and production: Evidence from the German International Sourcing Survey

Author(s): Kaus, Wolfhard; Zimmermann, Markus
Published in: IWH Discussion Papers, 14/2022, 2022
Publisher: Halle Institute for Economic Research

Intangible Capital and Productivity. Firm-Level Evidence from German Manufacturing

Author(s): Wolfhard Kaus, Viktor Slavtchev, Markus Zimmermann
Published in: IWH Discussion Papers, 1/2020, 2020
Publisher: Halle Institute for Economic Research (IWH)

Import Competition and Firm Productivity: Evidence from German Manufacturing

Author(s): Richard Bräuer, Matthias Mertens, Viktor Slavtchev,
Published in: IWH Discussion Papers, 20/2019, 2019
Publisher: Halle Institute for Economic Research (IWH)

Intellectual Property and the Organization of the Global Value Chain

Author(s): Stefano Bolatto & Alireza Naghavi & Gianmarco Ottaviano & Katja Zajc Kejzar
Published in: CEP Discussion Papers, 2020, Page(s) dp1673
Publisher: Centre for Economic Performance, LSE

Low interest rates in Europe and the US: one trend, two stories

Author(s): Demertzis, M. and N. Viegi
Published in: Policy Contribution, 07/2021, 2021
Publisher: Bruegel

One Size Does Not Fit All: TFP in the Aftermath of Financial Crises in Three European Countries

Author(s): Christian Abele, Agnès Bénassy-Quéré, Lionel Fontagne
Published in: CESifo Working Papers, 8891, 2021, ISSN 2364-1428
Publisher: Munich Society for the Promotion of Economic Research - CESifo GmbH
DOI: 10.2139/ssrn.3788713

We Were the Robots: Automation and Voting Behavior in Western Europe

Author(s): Massimo Anelli, Italo Colantone, Piero Stanig
Published in: IZA Discussion Paper Series, 12485, 2019, ISSN 2365-9793
Publisher: Deutsche Post STIFTUNG

The cleansing effect of banking crises

Author(s): Gropp, Reint; Ongena, Steven; Rocholl, Jörg; Saadi, Vahid
Published in: Economic Inquiry, Vol. 60 (3), 2022, Page(s) 1186-1213, ISSN 1465-7295
Publisher: Wiley
DOI: 10.1111/ecin.13069

Worker Participation in Decision-making, Worker Sorting, and Firm Performance

Author(s): Steffen Mueller, Georg Neuschaeffer
Published in: Industrial Relations Journal, Vol. 60, No. 4, 2021, ISSN 1468-232X
Publisher: Wiley
DOI: 10.1111/irel.12288

Individual vulnerability to industrial robot adoption increases support for the radical right

Author(s): Massimo Anelli, Italo Colantone, and Piero Stanig
Published in: PNAS, Vol.118 | No.47, 2021, ISSN 1091-6490
Publisher: National Academy of Science
DOI: 10.1073/pnas.2111611118

Immaterielles Kapital und Produktivität im Verarbeitenden Gewerbe: Ergebnisse auf Basis verknüpfter Einzeldaten (Micro Data Linking)

Author(s): Zimmermann, Markus
Published in: WISTA - Wirtschaft und Statistik, Vol. 72, Iss. 3, 2020, Page(s) 61-75, ISSN 1619-2907
Publisher: Statistisches Bundesamt (Destatis)