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The Spanish Productivity Puzzle in the Great Recession

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  • Hospido, Laura
  • Moreno-Galbis, Eva

Abstract

While Spain has traditionally underperformed its European neighbors in terms of labor productivity, this trend reverses after 2007. Part of the explanation for this reversal is likely to be the direct impact of decreasing labor inputs relative to capital. Using a longitudinal sample of Spanish manufacturing and services companies between 1995 and 2012, we show that the recent increase in Spanish aggregate productivity is also driven by the behavior of firm-level total factor productivity (TFP), and by composition effects. By combining firm-level information on balance sheet items, collective agreements and imports/exports, we document that firm TFP is positively correlated to firm-specific collective agreements and access to external markets during the whole period. In addition, our estimates indicate that firm TFP was negatively correlated to the proportion of temporary workers during the expansionary period (1995-2007), but positively correlated during the crisis (2008-2012).

Suggested Citation

  • Hospido, Laura & Moreno-Galbis, Eva, 2015. "The Spanish Productivity Puzzle in the Great Recession," CEPREMAP Working Papers (Docweb) 1510, CEPREMAP.
    • Handle: RePEc:cpm:docweb:1510
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    Cited by:

    1. Anete Pajuste & Hernán Ruffo, 2017. "Wage rigidity and workers’ flows during recessions," SSE Riga/BICEPS Research Papers 4, Baltic International Centre for Economic Policy Studies (BICEPS);Stockholm School of Economics in Riga (SSE Riga).
    2. Askenazy, Philippe & Erhel, Christine, 2015. "The French Productivity Puzzle," IZA Discussion Papers 9188, Institute of Labor Economics (IZA).
    3. Cristina Fernández & Aitor Lacuesta & José Manuel Montero & Alberto Urtasun, 2015. "Heterogeneity of markups at the firm level and changes during the great recession: the case of spain," Working Papers 1536, Banco de España.
    4. Román-Collado, Rocío & Colinet, María José, 2018. "Are labour productivity and residential living standards drivers of the energy consumption changes?," Energy Economics, Elsevier, vol. 74(C), pages 746-756.
    5. F. J. Escribá-Pérez & M. J. Murgui-García & J. R. Ruiz-Tamarit, 2017. "Economic and Statistical Measurement of Physical Capital with an Application to the Spanish Economy," LIDAM Discussion Papers IRES 2017020, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
    6. Francisco-Javier Escribá-Pérez & María-José Murgui-García & José-Ramón Ruiz-Tamarit, 2022. "The devil is in the details: Capital stock estimation and aggregate productivity growth—An application to the Spanish economy," Portuguese Economic Journal, Springer;Instituto Superior de Economia e Gestao, vol. 21(1), pages 31-50, January.
    7. Borja Jalón & Simón Sosvilla-Rivero & José A. Herce, 2017. "Countercyclical Labor Productivity: The Spanish Anomaly," IREA Working Papers 201712, University of Barcelona, Research Institute of Applied Economics, revised Jun 2017.
    8. Román-Collado, Rocío & Colinet, Maria José, 2018. "Is energy efficiency a driver or an inhibitor of energy consumption changes in Spain? Two decomposition approaches," Energy Policy, Elsevier, vol. 115(C), pages 409-417.
    9. Peter S. Eppinger & Nicole Meythaler & Marc-Manuel Sindlinger & Marcel Smolka, 2018. "The great trade collapse and the Spanish export miracle: Firm-level evidence from the crisis," The World Economy, Wiley Blackwell, vol. 41(2), pages 457-493, February.
    10. del Río, Fernando & Lores, Francisco-Xavier, 2023. "Accounting for spanish economic development 1850–2019," Economic Modelling, Elsevier, vol. 121(C).
    11. Antonio Cutanda, 2022. "The elasticity of substitution and labor-saving innovations in the Spanish regions," Estudios de Economia, University of Chile, Department of Economics, vol. 49(2 Year 20), pages 123-144, December.
    12. del Río, Fernando & Lores, Francisco-Xavier, 2023. "Accounting for Spanish economic development 1850-2019," MPRA Paper 116025, University Library of Munich, Germany.

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    More about this item

    Keywords

    labor productivity; TFP; temporary workers; collective agreements; exporting firms;
    All these keywords.

    JEL classification:

    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • J52 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Dispute Resolution: Strikes, Arbitration, and Mediation

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