The productivity puzzle in business services

Arbeitspapier

In Germany, the productivity of professional services, a sector dominated by micro and small firms, declined by 40 percent between 1995 and 2014. This productivity decline also holds true for professional services in other European countries. Using a German firm-level dataset of 700,000 observations between 2003 and 2017, we analyze this largely uncovered phenomenon among professional services, the 4th largest sector in the EU15 business economy, which provide important intermediate services for the rest of the economy. We show that changes in the value chain explain about half of the decline and the increase in part-time employment is a further minor part of the decline. In contrast to expectations, the entry of micro and small firms, despite their lower productivity levels, is not responsible for the decline. We also cannot confirm the conjecture that weakening competition allows unproductive firms to remain in the market.

Angaben zum Objekt

• Sprache: Englisch

Verweise und Beziehungen

• Erschienen in: Series: DIW Discussion Papers ; No. 1960

Klassifikation und Themen

• Klassifikation: Wirtschaft ; Personal, Professional, and Business Services ; Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence ; Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity ; Production, Pricing, and Market Structure; Size Distribution of Firms
• Thema: business services ; labor productivity ; productivity slowdown

Beteiligte, Orts- und Zeitangaben

• Ereignis: Geistige Schöpfung
• (wer): Kritikos, Alexander ; Schiersch, Alexander ; Stiel, Caroline
• Ereignis: Veröffentlichung
• (wer): Deutsches Institut für Wirtschaftsforschung (DIW)
• (wo): Berlin
• (wann): 2021

Weitere Informationen

• Handle: http://hdl.handle.net/10419/236748
• Letzte Aktualisierung: 10.03.2025, 11:44 MEZ