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Heavyweights – The Impact of Large Businesses on Productivity Growth

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  • Oliver Falck

Abstract

The idea of an industrial policy that promotes large businesses—heavyweights—as the best way to compete in a globalized world has become, again, en vogue among European politicians. The only apparent controversy about the idea revolves around whether it is better to promote national champions or, instead, European champions. Empirical evidence on the issue is rare and contradictory. A uniquely rich industry-level dataset for Germany is used in this paper to test whether large business size in an industry fosters growth in terms of total factor productivity (TFP). The results suggest that the overall effects of firm size on TFP growth are negative.

Suggested Citation

  • Oliver Falck, 2007. "Heavyweights – The Impact of Large Businesses on Productivity Growth," CESifo Working Paper Series 2135, CESifo.
    • Handle: RePEc:ces:ceswps:_2135
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