GOLDEN GROWTH
Table A4.1 shows the composition of the final sample of surviving firms adopted in the empirical analysis. Table A4.1: Sample composition Country
Number of firms per year
Bosnia and Herzegovina
590
Belgium
2,485
Czech Republic
2,410
Estonia Spain
561 16,850
Finland
1,035
France
15,029
Croatia
1,211
Italy
17,143
Norway
1,523
Poland
3,811
Romania
4,249
Serbia
1,465
Sweden
2,436
Slovenia
526
Ukraine
6,782
Econometric results To analyze productivity growth in Europe, while disentangling the impact of firm level from country-level characteristics, we start from estimating the following firm-level equation: Δln(Prodi)03-08 = α + β2ln(Prodi)03 + β2 Agei,03 + β3 Sizei,03 + β4OwnTypei,03 +
∑φSector + ∑γCountry + ε , m
j
i
where Δln(Prodi)03-08 is the annualized growth rate of productivity (defined as value added per employee) of the i firm from 2003 to 2008.49 On the right side, besides the error term we include some observable firm characteristics such as size, age, and ownership. Size, as in 2003, is expressed in number of employees on the company’s payroll, defined by the categories 10–49 total employees, 50–249, 250–499, 500–999, and 1,000 or more. Age (in years), as in 2003, is defined by the categories of 1–5 years old, 6–10, 11–20, 21–30, and older than 30. Ownership type, in 2003, is defined by a categorical variable distinguishing whether the firm is: a global headquarter of a group with international presence or one of its local subsidiaries, a foreign-affiliated firm,50 or a purely domesticowned firm.51 As we control for (initial) firm characteristics in 2003, we also include as a right-side variable the (log of) productivity level in baseline as a way to control for the fact that firms that start at a higher level may grow at a slower rate. Sectorm is a vector of sector dummy variables defined at NACE 1.1 level and Countryj is a vector of country fixed effects. Estimations are produced using ordinary least squares, and errors are clustered by country to allow for possible correlations in growth rates across firms in the same country. Regressions are run separately for EU15, EU12, and other countries as a way to better search for the sources explaining the differences between the two regions. Besides, in order to explore the sector
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