Firm-Level Total Factor Productivity Convergence in German Electricity and Gas Industry
7 Pages Posted: 14 Apr 2020
Date Written: March 20, 2020
Abstract
This paper investigates the degree of total factor productivity convergence for the German electricity and gas firms. We use different approaches to compute the productivity level and several old and new panel unit root tests from the second generation to check the existence of a convergence process. For robustness purpose we compare the convergence between small and medium-sized enterprises and large companies. Our findings show the existence of the convergence process in terms of total factor productivity, result confirmed by all categories of tests we use. Therefore, an innovation transfer is recorded between German electricity and gas firms, transfer that is slightly higher for small and medium-sized enterprises.
Keywords: total factor productivity, convergence, panel unit root tests, firm-level data, German electricity and gas industry
JEL Classification: D24, O33
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