The CompNet Competitiveness Database
The Competitiveness Research Network (CompNet) is a forum for high level research and policy analysis in the areas of competitiveness and productivity. Founded in 2012 by the European System of Central Banks (ESCB) to foster the debate on competitiveness issues among partner institutions and researchers, it aims at providing a robust theoretical and empirical link between drivers of competitiveness and macroeconomic performance for research and policy analysis purposes. For further information and details, please visit the CompNet website.
Data and Methods
CompNet has created a competitiveness indicator dataset including a number of European countries. The database is unique in terms of its coverage and cross-dimensional analysis potential as it links, for example, trade or the financial status of firms with their productivity.
For a description of the database and methodological issues please refer to the documentation provided on the Data Section of the CompNet webpage.
All researchers can apply to have access to the CompNet competitiveness data by submitting the data request form to the CompNet team. CompNet members and participating institutions that would like to access the data are requested to submit a shortened project description that is available upon request.
CompNet members have published more than 50 papers both in the ECB’s Working Paper Series and in a number of peer-reviewed journals. The detailed list of publications is reported on the Research Ouput Section of the CompNet webpage.
Furthermore, in 2017, CompNet has set up its own series of discussion papers:
Micro-mechanisms Behind Declining Labour Shares: Market Power, Production Processes, and Global Competition
in: IWH-CompNet Discussion Papers, No. 3, 2019
This article investigates how changing production processes and increasing market power at the firm level relate to a fall in Germany’s manufacturing sector labour share. Coinciding with the fall of the labour share, I document a rise in firms’ product and labour market power. Notably, labour market power is a more relevant source of firms’ market power than product market power. Increasing product and labour market power, however, only account for 30% of the fall in the labour share. The remaining 70% are explained by a transition of firms towards less labour-intensive production activities. I study the role of final product trade in causing those secular movements. I find that rising foreign export demand contributes to a decline in the labour share by increasing labour market power within firms and by inducing a reallocation of economic activity from nonexporting- high-labour-share to exporting-low-labour-share firms
Labour Market Power and the Distorting Effects of International Trade
in: IWH-CompNet Discussion Papers, No. 2, 2019
This article examines how trade shocks shape labour market imperfections that create market power in labour markets and prevent an efficient allocation of labour. I develop a framework for measuring such labor market distortions in monetary terms and document large degrees of those distortions in Germany’s manufacturing sector. Import competition can only exert labor market disciplining effects when firms rather than workers have labour market power. Otherwise, export demand and import competition shocks tend to fortify existing distortions by amplifying labour market power structures. This diminishes the gains from trade compared to a model with perfectly competitive labour markets.
The Effect of the Single Currency on Exports: Comparative Firm-level Evidence
in: IWH-CompNet Discussion Papers, No. 1, 2019
We investigate how adopting the euro affects exports using firm-level data from Slovakia and Estonia. In contrast to previous studies, we focus on countries that adopted the euro individually and had different exchange rate regimes prior to doing so. Following the New Trade Theory we consider three types of adjustment: firm selection, changes in product varieties and changes in the average value of the exports that compose the exports of individual firms. The euro effect is identified by a difference in differences analysis comparing exports by firms to the euro area countries with exports to the EU countries that are not members of the euro area. The results highlight the importance of the transaction costs channel related to exchange rate volatility. We find the euro has a strong pro-trade effect in Slovakia, which switched to the euro from a floating exchange rate, while it has almost no effect in Estonia, which had a fixed exchange rate to the euro prior to the euro changeover. Our findings indicate that the euro effect manifested itself mainly through the intensive margin and that the gains from trade were heterogeneous across firm characteristics.
Living with Lower Productivity Growth: Impact on Exports
in: IWH-CompNet Discussion Papers, No. 1, 2018
This paper investigates the impact of sustained lower productivity growth on exports, by looking at the role of the productivity distribution and allocative efficiency as drivers of export performance. It follows and goes beyond the work of Barba Navaretti et al. (2017), analysing the effects of productivity on exports depending on the dynamics of allocative efficiency. Low productivity growth is a well-documented stylised fact in Western countries – and possibly a reality likely to persist for some time. What could be the impact of persistent sluggish growth of productivity on exports? To shed light on this question, this paper examines the relationship between the productivity distribution of firms and sectoral export performance. The structure of firms within countries or even sectors matters tremendously for the nexus between productivity and exports at the macroeconomic level, as the theoretical and empirical literature documents. For instance, whether too few firms at the top (lack of innovation) or too many firms at the bottom (weak market selection) drives slow average productivity at the macro level has very different implications and therefore demands different policy responses.
Wage Bargaining Regimes and Firms‘ Adjustments to the Great Recession
in: IWH-CompNet Discussion Papers, No. 1, 2017
The paper aims at investigating to what extent wage negotiation set-ups have shaped up firms’ response to the Great Recession, taking a firm-level cross-country perspective. We contribute to the literature by building a new micro-distributed database which merges data related to wage bargaining institutions (Wage Dynamic Network, WDN) with data on firm productivity and other relevant firm characteristics (CompNet). We use the database to study how firms reacted to the Great Recession in terms of variation in profits, wages, and employment. The paper shows that, in line with the theoretical predictions, centralized bargaining systems – as opposed to decentralized/firm level based ones – were accompanied by stronger downward wage rigidity, as well as cuts in employment and profits.