Productivity analysis in Croatia: An assessment using firm level data – PACR

Commissioned by: World Bank
Project duration: January 15, 2014 – February 28, 2014
Project manager: Sonja Radas, PhD
Collaborators: Bruno Škrinjarić, Edo Rajh

Brief outline: 
Within the project, the following empirical exercises were performed: 
  • Benchmarking performance indicators across regions 
    • This analysis focused on firm heterogeneity across regions. In order to assess this heterogeneity, the average percent difference of labor productivity, TFP and unit labor cost across regions was estimated.
  • Productivity disparity between exporters and non-exporters 
    • This analysis first identified both the regional distribution of exporting firms and the regional propensity to export. The goal of this analysis was to compare the differential performance of TFP across exporters and non-exporters, by region, and in the country as a whole.
  • Firm dynamics and TFP growth decomposition 
    • This analysis used a two-step approach. First, incumbent firms as well as market exiters and entrants were identified. Second, the contribution of each of these groups to aggregate domestic productivity growth was computed. Four groups of firms were identified: surviving firms (S), new start-ups (NSU), new big-entries (NBE), and exit firms (X). More precisely, surviving firms were those that were sampled in both 2008 and 2012, while exit firms were sampled only in 2008. New start-ups were those firms whose date of incorporation was more recent than 2008, and new big-entries were medium or large firms sampled in 2012 which were incorporated prior to 2008 but were small in 2008 (i.e. they were existing in 2008 but as small firms). The goal of this analysis was to find out how much of the TFP growth in the period 2008-2012 came from each group of firms.
  • Gazelles mapping 
    • Gazelles refered to high-growing firms, and were of particular interest both because of their contribution to employment and as an indicator of entrepreneurship. Gazelles were defined as firms that grew at least 20 percent in turnover for at least three years. This analysis mapped the sectoral and ownership distribution at regional level of gazelles. 

This project resulted in a research note containing results of the above analysis.