Expert workshop on the creation and uses of combined environmental and economic performance datasets at the micro-level - 10-11 July 2018 - OECD, Paris

1. PRODUCTIVITY, BUSINESS DYNAMICS AND
R&D POLICIES:
AN OVERVIEW OF THE OECD MULTIPROD, ICROBERD
AND DYNEMP PROJECTS
Chiara Criscuolo
(OECD, STI/PBD)
Based on work with Silvia Appelt, Matej Bajgar, Giuseppe Berlingieri,
Patrick Blanchenay, Sara Calligaris ,Flavio Calvino and Fernando
Galindo-Rueda

2. A long journey…

3. Motivation
 Productivity slowdown
 Increasing divergences (earnings, between high
and low performing firms), are these linked?
 Debate on job creation and firm characteristics
 Debate on declining business dynamism
 What role for policy?
 Importance of R&D tax credit and role of policy
design

4. THE MULTIPROD,
MICROBERD AND DYNEMP
PROJECTS

5. COUNTRIES
Policy
questions Data strategy to provide evidence
in cross-country setting
Code for data
cleaning, linking
and analysis
modular
&
customised
CONFIDENTIAL
MICRODATA
Metadata:
variables, coverage,
weighting...
Code run by
national experts
Agreed, non confidential
microaggregated data
Descriptive and
econometric evidence
Country notes
A distributed microdata approach

6. Coverage:
• 24 countries (and expanding)
• Period: 1995-2012(4);
• Whole economy, detailed at 2-digit level;
• Some statistics further refined by: i) age or/and size classes, ii) ownership,
iii) quantiles of the productivity distribution or quantiles of the size
distribution.
Representativeness:
 Typically have whole population of firms
 For countries with partial data (production survey)
 Reweight using Business Register population weights (if available)
 Compute number of firms by year / sector / size class
Productivity within and across
countries: The OECD MultiProd project

7. Some of the policy questions that can be answered:
 Has divergence in productivity increased over time? Is the increase
due to the top or the bottom of the distribution? Is this linked to
wages dispersion?
 Is the allocation of resources efficient in a particular economy?
 What are the contribution of business dynamism to productivity
growth?
 What is the role of large firms for the economy?
How?
 Measures of Productivity: LP; MFP Wooldridge; MFP Solow…
 Changes in distributions over time (productivity; wage and size).
 Firm-level productivity and employment growth;
 Static and Dynamic Productivity decompositions
 Measures of Misallocation
 ….
MultiProd – A brief overview

8. Building blocks and data sources:
 DynEmp
– DynEmp Express, DynEmp v.2 and DynEmp3
– Firm-level data from BR or other administrative sources
 DynEmp Regional
– Focus at the local level (TL2 regions, metropolitan areas)
– Plant-level data from administrative sources
Coverage:
 More than 20 countries participate in the project
 Data until 2015 (DynEmp3 and DynEmp Regional)
 Age, size, industry, employment growth percentiles, trade, ownership,
transition dynamics following cohorts of firms
Representativeness:
 Data aim at universal (population) coverage
Employment and business dynamics:
the OECD DynEmp project

9. Some of the policy questions that can be answered:
 Which are the businesses that create more jobs? What is the role of size
and age?
 What role of start-ups and new firms for job creation across countries?
 What are the policy determinants of differences in employment growth
between entrants and established incumbents?
 Is business dynamism declining?
How?
 Gross job flows
 Employment growth statistics: average employment growth, growth
dispersion and volatility
 Business dynamism measures: churning rates and excess job reallocation
rates; entry and exit rates
 Cohort-level analysis: survival shares, post-entry growth performance up to
10 years
 Distribution of employment growth rates
DynEmp – A brief overview

10. microBeRD
Confidential national
microdata
Non-
confidential
harmonized
output
Statistical
code
R&D survey
+ Corporate tax data
+ R&D grant/loan data
+ Business register data
+ Patent data
+ Innovation data
Incentive
design
information
As seen on... Dynemp and Multiprod

11. 1. Cross-country descriptive evidence
– structure & concentration
– characteristics of beneficiaries
2. Evidence on causal effects
– comparing effectiveness
– effect on different types of firms
– interaction
– spillovers
3. Supporting analytical capacity
Project aims

12. Project stages (2016-2019)
Descriptive
statistics on
BERD
Micro-based
subsidy rates
Within- and
cross-country
estimates of
impact
Heterogeneity,
interaction,
spillovers

Where are we now?
microBeRD analysis
CHL, CZE, FRA, NOR,
PRT
BEL, DEU, ISR, ITA,
JPN, NLD, NZL, TUR
BERD
+
TAX
BERD
metadata collection
BEL, CHL, CZE, DEU,
FRA, ISR, ITA, JPN,
NLD, NOR, NZL, PRT,
TUR
CHL, CZE, NOR, PRT
Country participation

13. SOME KEY TAKEAWAYS, SO
FAR

14. Increase in Productivity Dispersion,
especially at the bottom of the distribution
Source: Berlingieri et al. (2017).
Note: Year dummy estimates of a regression of between-firm log-productivity dispersion (90th to 10th percentiles
ratio) within country-sector pairs.

15. But also… Increase in wage inequality,
especially at the bottom of the distribution
Source: Berlingieri et al. (2017).
Note: Year fixed-effects of a regression of log-wage dispersion, within country-sector pairs.

16. These divergences are linked and depend
on policy and structural factors
 Wage dispersion is linked to productivity
dispersion within country-sector over time
 Role of policy and structural factors
 Increased globalisation and digitalisation associated with
wage divergence, and stronger productivity-wage
dispersion link
 Important role of minimum wages, unionization, EPL and
wage coordination

17. Young firms are key for job creation across
countries
Source: Criscuolo, Gal and Menon (2014)

18. Important heterogeneity along
different dimensions
 The extent to which new firms add new jobs to
the existing workforce can be decomposed in
 Start-up ratio
 Average size at entry
 Survival share
 Post-entry growth
 Important cross-country variation along these
margins
 New firms appear more vulnerable to the policy
environment than established incumbents

19. Business dynamism seems to decline across
countries…
-5
-4.5
-4
-3.5
-3
-2.5
-2
-1.5
-1
-0.5
0
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
entry rate (pos. emp.) churning rate excess job reall. rate
Source: OECD DynEmp v.2 database.

20. ROLE OF R&D TAX INCENTIVE
REFORMS? EVIDENCE FROM FRANCE
Source: OECD microBeRD.
Note: Weighted statistics based on the R&D survey sample. R&D expenditure deflated with GDP deflator.

21. NEXT STEPS...

22. Data
 Extend the analysis to more countries
 Adding dimensions at the firm level (e.g.: skill/occupation
composition)
 Use of Matched employer-employee data
Analyses
 Digitalisation and business dynamics
 Understand the link among divergence, concentration,
market power, and declining business dynamism
 Determinants of declining business dynamism
 Understand the links among wage, size and productivity
 Misallocation and the role of policy
Next Steps

23. THANK YOU!
chiara.criscuolo@oecd.org
MultiProd@oecd.org
DynEmp@oecd.org

24. MultiProd
http://www.oecd.org/sti/ind/multiprod.htm
DynEmp
http://www.oecd.org/sti/dynemp.htm
Further information online…

25. BACKUP SLIDES
(NOT SENT)

26. Dispersion has grown, especially in
services, where it is higher
Source: OECD MultiProd project, March 2017.
Note: The figure plots the estimated year dummies of a regression of log-productivity dispersion (90th and 10th percentiles ratio)
within country-sector pairs, using data from the following countries: AUT, BEL, DNK, FIN, FRA, HUN, ITA, JPN, NLD, NOR, NZL,
PRT, SWE. The graphs can be interpreted as the cumulated growth rates of productivity dispersion within each country and sector
over the period. For instance, in 2012 productivity dispersion in manufacturing is roughly 9% higher than in 2001.

27. 27
Churning and growth: a taxonomy of
sectors
Source: Blanchenay et al., Forthcoming., based on OECD DynEmp database.
Advertising and mkt res.
Construction
Textile
Elect. Equip.
Scientific R&D.