Micro, Macro, and Meso Determinants of Productivity Growth in Argentinian Firms

In this paper we analyze the impact of micro-, meso-, and macro-economic determinants on firm productivity growth from an evolutionary and systemic perspective, in small and medium-sized Argentinean enterprises during 2006–2008. This period is characterized by strong employment and productivity growth. In this context, increases in productivity are explained better by innovation rather than falling employment. The microeconomic dimension is tackled by resorting to innovation results (product and process), which in turn are estimated through innovation efforts, following the well-known Crepon, Duguet, and Mairess (CDM) approach. The meso dimension is considered in terms of each firm’s position in the competitive space; that is, whether each firm’s productivity level is below or above the sector average. The macro determinant of changes in productivity considered here is the expansion of domestic demand, estimated by the sectoral apparent consumption. The results show that the micro and meso dimensions contribute to explaining firm-level productivity growth. Innovation results, estimated through innovation efforts and linkages, explain productivity growth. The firm’s position in the competitive space shows a U-shaped relationship with productivity growth. Finally, sectoral demand does not seem to have any impact on our study.