Data for: Product Market Regulation, Business Churning and Productivity: Evidence from the European Union Countries

Published: 10-04-2020| Version 1 | DOI: 10.17632/dzbf8vsxt9.1
Contributors:
Robert Anderton,
Benedetta Di Lupidio,
Barbara Jarmulska

Description

The dataset on business churning, productivity and product market regulation uses publicly available data from Eurostat, Ameco and OECD. Data on business churning are retrieved from the Eurostat’s Business Demography Database, which provides statistics on firms’ birth and death rates. The birth (death) rate is defined as the number of enterprise births (deaths) in the reference period (t) divided by the number of enterprises active in t. The business ‘’churn’’ – or firm turnover – is computed as the sum of the birth and death rates. Additional data from Eurostat are retrieved to compute a decomposition of labour productivity, as well as to create a measure for allocative efficiency across and within groups of firms classified by size, for country-year-sector combinations. Total factor productivity (TFP) growth is defined as the portion of output that is not explained by the amount of inputs used in production, and therefore referred to as a representation of technological progress. TFP is computed on the basis of a neo-classical Cobb-Douglas production function, as a residual of the gross domestic product after the contributions of labour and capital have been taken into account. Its level is determined by how efficiently and intensely the inputs are utilised in production. As such, the computation of TFP requires some assumptions. In particular, we assume that the elasticities of labour and capital are equal to 2/3 and 1/3, respectively. Moreover, using aggregate values of total employment in millions of persons and consumption of fixed capital in millions we assume constant skill composition of the employed skill force and constant composition of the capital stock. TFP variables are obtained using Ameco data and are available with a sectoral breakdown. Product market regulation is measured by the OECD Regulation in Energy, Transport and Communications Index (PMR ETCR). Finally, we construct an indicator which captures the cyclical position of a given sector. Following Bartelsman et al. (1994), the indicator is constructed using the growth of downstream sectors, i.e. sectors that buy inputs from the sector of interest. The cyclical indicator is computed using World Input-Output Tables, providing data in years 2000-2014 (Timmer et al. 2015), and deflated by the GDP deflator. The overall (slightly unbalanced) dataset covers 28 European Union countries over the period 2000-2014.

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