Regional dimension of firm level productivity determinants: the case of manufacturing and service firms in Ukraine

Abstract

The main goal of this paper is to empirically investigate the regional dimension of productivity determinants for 24 regions of Ukraine using micro-level dataset for individual firms in 2013. The novelty of our analysis is the comparison of the determinants of productivity in the manufacturing and service sectors. We estimate both pooled regressions for all regions and separate regressions for particular regions. The estimation results obtained for the entire country demonstrate that the majority of our explanatory variables are statistically significant for the manufacturing sector and all are statistically significant for the service sector although at different levels of significance. At the same time, the estimation results obtained separately for each region show a large degree of heterogeneity across the regions and sectors and the lack of scale economies at the firm-level.

Exploring firm-level and sectoral variation in total factor productivity (TFP)

“…Previously published studies on productivity determinants (Botri c et al, 2017;Cie slik et al, 2019;Du and Temouri, 2015) examine and confirm various factors that cause variability in productivity levels, and agree on considerable and persistent heterogeneity in the firm-level productivity, across countries and industries. For instance, the research based on the industrial organisation literature usually addresses the relationship between productivity levels and market structure (Syverson, 2004), the influence of competition (Galdon-Sanchez and Schmitz, 2002;Holmes and Schmitz, 2010), technology issues and technology spillovers (Bloom et al, 2013;Castellacci, 2007;Los and Verspagen, 2007) or organizational structures (Chang and Lee, 2016;Lim and Sanidas, 2011;Schoar, 2002) in the context of productivity growth.…”

“…Hoogstra and van Dijk (2004) contributed to the literature by documenting an indisputable role of location factors and growth and firm performance. Other studies on productivity have also highlighted the role of spatial variation (Cie slik et al, 2019;Giannakis and Bruggeman, 2015;Haldane, 2017;Mart ınez-Victoria et al, 2018). It is widely acknowledged that firms are dependent on external influences for their functioning (Henley, 2018) and are influenced by spatially differentiating factors, such as geographical opportunities and constraints, resources, spillover factors (Carlsson and Dahlberg, 2003) and public policy (Dvoulet y et al, 2020(Dvoulet y et al, , 2021Harris and Moffat, 2020;Pickernell et al, 2013).…”

“…Within the international trade theory, the studies usually confirm that the exporter status has significant contribution for firm-level productivity heterogeneity (Bravo-Ortega et al, 2014;Manso Machado, 2019;Nunes et al, 2020;Salomon and Jin, 2008). Several studies also examine the spatial dimension of the differences in firm-level productivity (Cie slik et al, 2019;Mart ınez-Victoria et al, 2018) or productivity variations across industries (Biatour et al, 2011;Botri c et al, 2017). Although the existing research literature related to this topic is very large in scale and scope, robust empirical analyses on the firm-and sectoral-level productivity variations, based on large longitudinal and representative datasets, are still sparse, as well as studies that examine the long-term relationships between economic variables and productivity development (Erken et al, 2018).…”

“…The objective of this study is to identify and explore factors affecting the productivity of companies in the Czech Republic in the period of 2000-2019. As an outcome variable, we employ the most appropriate indicator of productivitytotal factor productivity (TFP), which is used in the majority of previous studies (Aiello et al, 2015;Botri c et al, 2017;Cie slik et al, 2019;and others). TFP represents an increase in total production, which exceeds the increase in production caused by an increase in the amount of inputs involved in this production.…”

Drivers of manufacturing firms’ productivity: a micro-perspective to industrialization in Nigeria

“…Similarly, Calza et al (2019) note that to develop policies oriented towards broad-based, inclusive, and sustained growth, it is, therefore, necessary to study the performance of manufacturing firms' productivity and its determinants. However, it is observed from the extant literature that majority of the previous studies on firm-level productivity analysis are conducted for advanced and emerging economies (Asaftei et al 2008;Backman 2013;Cieślik et al 2019;Che and Zhang 2018;Driffield and Du 2007;Diebolt et al 2017;Fernandes, 2008;Guzmán et al 2019;Landi and Niederreiter 2017;Sanyal and Shankar 2011;Sun and Hong 2011;Squicciarini and Voigtlände 2015;Rahmati and Pilehvari 2019;Xu et al 2020). However, the perpetual differences in manufacturing sector productivity growth among economies prompted the need for country-specific studies.…”