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Frontier firms and followers in the Netherlands: estimating productivity and identifying the frontier

CPB Background Document, 2 July 2018

This study shows that constructing a large dataset, which sufficiently covers all firm sizes, is a prerequisite for studying the divergence hypothesis. We merge datasets of individual firm and employee data in the years 20062015 for the Netherlands, resulting in a representative sample of corporations. We find no evidence of diverging productivity between firms on the national frontier and laggard firms.

This research is part of a three-year research project on productivity growth in the Netherlands commissioned by the Ministry of Economic Affairs and Climate. A previous study (Grabska et al., 2017) finds that, as in many other OECD countries, productivity growth in the Netherlands is slowing. We follow up this study by analysing the productivity frontier firms and laggard firms, based on the work that is ongoing at the OECD in this area.  This study aims to uncover the dynamics at a national level in terms of firm productivity in the Netherlands.

This background document is a technical report that described the literature review, data, methodology and results used in the “Notitie koplopers en volgers” and the ESB article “Geen divergentie in productiviteit van koplopers en volgers in Nederland”, both published (only in Dutch) on 28th June 2018.

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