Micro-based evidence of EU competitiveness: The CompNet Database. National Bank of Belgium Working Paper No. 253, March 2014

Lopez-Garcia, Paloma and di Mauro, Filippo and Benatti, Nicola and Angeloni, Chiara and Altomonte, Carlo and Bugamelli, Matteo and Daurizio, Leandro and Navaretti, Giorgio Barba and Forlani, Emanuele and Rossetti, Stefania and Zurlo, Davide and Berthou, Antoine and Sandoz-Dit-Bragard, Charlotte and Opromolla, Luca David and Soares, Ana Cristina and Chiriacescu, Bogdan and Cazacu, Ana-Maria and Lalinsky, Tibor and Dhyne, Emmanuel and Biewen, Elena and Hagemejer , Jan and Tello, Patry and Čede, Urška and Galuščák, Kamil and Harasztos, Péter and Merikyll, Jaanika (2014) Micro-based evidence of EU competitiveness: The CompNet Database. National Bank of Belgium Working Paper No. 253, March 2014. [Working Paper]

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Abstract

Drawing from confidential firm-level balance sheets in 11 European countries, the paper presents a novel sectoral database of comparable productivity indicators built by members of the Competitiveness Research Network (CompNet) using a newly developed research infrastructure. Beyond aggregate information available from industry statistics of Eurostat or EU KLEMS, the paper provides information on the distribution of firms across several dimensions related to competitiveness, e.g. productivity and size. The database comprises so far 11 countries, with information for 58 sectors over the period 1995-2011. The paper documents the development of the new research infrastructure, the construction of the database, and shows some preliminary results. Among them, it shows that there is large heterogeneity in terms of firm productivity or size within narrowly defined industries in all countries. Productivity, and above all, size distribution are very skewed across countries, with a thick left-tail of low productive firms. Moreover, firms at both ends of the distribution show very different dynamics in terms of productivity and unit labour costs. Within-sector heterogeneity and productivity dispersion are positively correlated to aggregate productivity given the possibility of reallocating resources from less to more productive firms. To this extent, we show how allocative efficiency varies across countries, and more interestingly, over different periods of time. Finally, we apply the new database to illustrate the importance of productivity dispersion to explain aggregate trade results.

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