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Do high‐quality local institutions shape labour productivity in Western European manufacturing firms?
Author(s) -
Ganau Roberto,
RodríguezPose Andrés
Publication year - 2019
Publication title -
papers in regional science
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.937
H-Index - 64
eISSN - 1435-5957
pISSN - 1056-8190
DOI - 10.1111/pirs.12435
Subject(s) - productivity , sample (material) , labour economics , business , quality (philosophy) , capital (architecture) , government (linguistics) , economic geography , economics , economic growth , geography , epistemology , chromatography , philosophy , chemistry , linguistics , archaeology
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.