The Economics of Firm Productivity

Productivity is an essential concept in almost every field related to Economics and Management. As Paul Krugman wrote in \The Age of Diminishing Expectations (1994) \Productivity isn't everything, but in the long run it is almost everything. A country's ability to improve its standard of living over time depends almost entirely on its ability to raise its output per worker." As we slowly exit { at the time of this writing { the nightmare of the 2020 COVID- 19 pandemic, enhancing productivity is even more critical. The crisis has battered global economic activity in an unprecedented way. Entire sectors have been forced to cease trading, and unemployment has risen to record levels. Governments, central banks and international organisations have respondedpromptly and massively to the shock, sheltering firrms and employees from its impact. This will, however, inevitably further slow aggregate productivity, at least in the short run. Thus, the debate on how to raise productivity is again in the headlines, and that is the subject of this book. We believe that any useful insight must be based on detailed granular information compiled at the level of the firm. To that end we will draw from research and the dataset produced by CompNet1, a large European research initiative that the authors founded a decade ago"--