Raquel Ortega-Argilés (p), Nikolaos Terzidis (p)

Nicola Cortinovis

This paper considers the contemporaneous relationship between two prevalent phenomena in the industrialized labor markets; namely job polarization and skills mismatch. For this we rely on extensive microdata from Statistics Netherlands and estimate quantitative indexes for job polarization and skills mismatch for the Dutch national and regional labor markets between 1999 and 2012. In addition, we advance the labor economics literature by investigating the interplay between job polarization, skill mismatch and regional productivity within a simultaneous equation regression framework.

Nicola Cortinovis (p), Lenka Wildnerova, Alexander Lembcke

Alexander Lembcke

The economic and international business literatures have for long time investigated the effects of multinational enterprises (MNEs) on the local economy. In this field, particular emphasis has been put on spillover effects generated from the presence of MNEs, that allow local firms to tap in and benefit from the valuable technological, cognitive and managerial assets of international firms. The empirical literature has found significant evidence of these positive spillover effects, mostly affecting the productivity of local firms in industries that are vertically related to MNEs. Whereas input-output (I-O) linkages are important channels for knowledge diffusion, conceptually other forms of relations may also induce similar effects. In particular, agglomeration economies literature suggests that knowledge can diffuse across industries even outside the scope of buyer-supplier relations. This paper addresses this issue, by providing a more comprehensive approach for capturing spillovers using both industrial relatedness (Hidalgo et al. 2007) and input-output linkages. In our empirical analysis, we focus on a panel of firms across 12 European countries over the period 2007-2015, based on Orbis Bureau van Dijk database. Using this data we study how the presence of multinational enterprises in the regional economy influence firm-level total factor productivity in domestically owned firms. Our preliminary results suggest that incoming multinationals do impact on productivity of domestic firms. In particular, a higher presence of multinationals tends to negatively affect the level of productivity of local firms in the same industry. We tentatively interpret such negative relation as the consequence of tougher competition for factors (e.g. more skilled workers being hired by MNEs). Differently, domestic firms benefit from a stronger presence of foreign enterprises in industries that are vertically related and inside the same region: this suggest MNE spillovers can contribute to productivity improvements even in relatively advanced European countries. Interestingly, however, these effects do not materialize in the case of the service industry, pointing towards significant (spatial) heterogeneity in the direction of the impact and intensity of MNE spillovers.

Alexandra Tsvetkova (p), Nikolaos Terzidis , Dylan Jong

Raquel Ortega-Argilés

Productivity, the efficiency of input conversion into output, is the main determinant of living standards. More productive economies have greater ability to support and enhance well-being of their citizens via higher incomes, better infrastructure, more services and other means. The drivers of productivity, and its effects on a range of social and economic outcomes, are the focus of a voluminous, long-standing and well-developed research literature. Despite the vast scholarly attention paid to productivity, however, it is mostly studied within industries and firms. The spatial dimension of the phenomenon is underdeveloped. In this paper we first provide an overview of the industry-level productivity research identifying a range of important determinants of productivity growth across countries and sectors/industries. We then demonstrate that these determinants themselves are shaped (at least to a degree) by subnational (regional and local) factors. We summarize regional science research that studies each of the productivity determinants identified in the first step and conclude by highlighting the importance of spatial dimension in the study of aggregate productivity growth.