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Productivity of Slovenian firms

Productivity of Slovenian firms. Polona Domadenik, PhD University of Ljubljana, Faculty of Economics Bojan Ivanc, CFA, CAIA Chamber of Commerce & Industry of Slovenia Denis Marinšek, PhD, CFA University of Ljubljana, Faculty of Economics. Motivation – Governance and Institutional Context.

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Productivity of Slovenian firms

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  1. Productivity of Slovenian firms Polona Domadenik, PhD University of Ljubljana, Faculty of Economics Bojan Ivanc, CFA, CAIA Chamber of Commerce & Industry of Slovenia Denis Marinšek, PhD, CFA University of Ljubljana, Faculty of Economics

  2. Motivation – Governance and Institutional Context • Privatization model in 90s favored internal owners (employees and managers) • efficient in SME , diversified ownership in big firms • State asan(in)efficient owner before and during the crisis • Period of 2004-2008 • riskier investments in private firms • ownership consolidation in firms with diversified owners • Deleveragingfollowing 2009 andgrowthafter2014 • Structural weaknesses within the regulatory system • The role of state aid(differenttypesofsubsidies) before and after the crisis

  3. Aim of the study

  4. Data • Firms’ annual financial statements – AJPES database 1995-2015 • Government subsidy allocation data – Ministryof Finance • Ownership structure gathered in several previous surveys • Methodology • TFP calculated as the residual from the production function (Levinsohn – Petrin procedure) • Dynamic production function estimation

  5. Results – all firms

  6. Results – all firms TFP in four different industries

  7. Results – all firms TFP according to export

  8. Results – state owned vs others TFP growth in state owned firms vs other firms

  9. Results – different owners TFP according to more detailed ownership structure

  10. What are factors that generate differences among firms? Before crisis After crisis Investment** R&D activity ** State owners * Subsidies** R&D activity *** Foreign owners *** Privatizatized firms ***

  11. Conclusions • Outperformingfactors: • Size (large to medium) • Exportorientation • R&D activity • Beforecrisisforeignownedfirmsandde-novo firmswere more productiveifcomparedwithothers. • After 2009 investmentand R&D activitywasimportantforproductivitygrowth, whilesubsidiesrepresentedsurvivingfactorforfirms in financialdifficulties. Stateownedfirmsreportedlowerproductivityduringthecrisis. • Zombie firmsrepresentedhighershare in totalstructure as reportedby OECD study (McGowan etal, 2017).

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