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Title: Do High-Quality Local Institutions Shape Labour Productivity in Western European Manufacturing Firms?

Author(s): Roberto Ganau and Andrés Rodríguez-Pose

Publication Date: April 2019

Keyword(s): Cross-Country Analysis, labour productivity, Manufacturing firms, Regional Institutions and Western Europe

Programme Area(s): International Trade and Regional Economics

Abstract: We investigate the extent to which regional institutional quality shapes firm labour productivity in western Europe, using a sample of manufacturing firms from Austria, Belgium, France, Germany, Italy, Portugal and Spain, observed over the period 2009-2014. The results indicate that regional institutional quality positively affects firms' labour productivity and that government effectiveness is the most important institutional determinant of productivity levels. However, how institutions shape labour productivity depends on the type of firm considered. Smaller, less capital endowed and high-tech sectors are three of the types of firms whose productivity is most favourably affected by good and effective institutions at the regional level.

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Bibliographic Reference

Ganau, R and Rodríguez-Pose, A. 2019. 'Do High-Quality Local Institutions Shape Labour Productivity in Western European Manufacturing Firms?'. London, Centre for Economic Policy Research. https://cepr.org/active/publications/discussion_papers/dp.php?dpno=13703