Firm productivity, heterogeneity and macroeconomic dynamics: a data-driven investigation

Abstract

In this paper, we offer a unique firm-level view of the empirical regularities underlying the evolution of the Lithuanian economy over the period of 2000-2014. Employing a novel dataset, we investigate key distributional moments of real and financial variables of Lithuanian firms. We focus in particular on the issues related to productivity, firm birth and death and the associated employment creation and destruction across firm sizes, industry classification and trade status (exporting vs. non-exporting). We refrain from any structural modelling attempt in order to map out the key economic processes across industries and selected firm characteristics. Nevertheless, existing theoretical and empirical findings guide our analysis and the selection of the main variables to investigate. We uncover similar regularities as already highlighted in the literature: trade participation and firm productivity are strongly positively linked, the 2008 recession has had a cleansing effect on the non-tradable sector, firm birth (death) is highly pro (counter)-cyclical. The richness of the dataset allows us to produce additional insights: for example, we observe an increasing share of exporting but a constant share of importing firms since 2000.

Financial Constraints, Productivity, and Investment: Evidence from Lithuania

“…5 The dataset further excludes observations that may lead to a violation of data confidentiality requirements. 6 Despite these shortcomings, there is a coverage of close to 95 percent of active firms in Lithuanian economy (Constantinescu and Proskute, 2019).…”

“…The administrative dataset does not have 2019 data available for all firms, therefore we focus on the period between 2000 and 2018 in our analysis.5 For more details refer toConstantinescu and Proskute (2019). For trends on employment and productivity and reallocation of resources during the financial crisis refer toTarasonis et al (2021).6 This affects very few large firms in Lithuanian economy.7 This is to make sure we are capturing active corporations and not individuals who may be benefiting from corporate tax schemes.8 The analysis in the table also includes the Micro firms with less than 10 employees.©International Monetary Fund.…”

Peculiarities of the dynamics of the enterprises of the Republic of Moldova by size classes

“…Причины, по которым ликвидируются предприятия разнообразны. Как правило, большинство неудач у микро-и малых пред-приятий связано недостатком общих управленческих навыков [7,8]. В свою очередь, крупные предприятия медленнее реагируют на изменения рынка, что приводит к значительным убыткам.…”