The superstar firms model provides a compelling explanation for two simultaneously occurring phenomena: the rise of concentration in industries and the fall of labor shares. Our empirical analysis confirms two of the underlying assumptions of the model: the market share increases and the labor share decreases with increasing firm-level total factor productivity, providing support for the superstar ...
The purpose of the project is to measure the digitalisation of the German economy and to track its development over time. The results will serve as an evidence-based framework for decision makers in policy and business. The project comprises several topics. DIW Berlin focuses on the analysis of the productivity effects of digitization.
In sectors of general interests, the economic activity of the state decreased over decades as a consequence of privatisation and liberalisation. Recently, local governments began to remunicipalise in the energy and water sector, thereby creating a new and modern generation of state-owned firms. These firms, however, differ in organisation and production environment from the state monopolists of...
This paper analyzes the effect of agglomeration economies on firms’ total factor productivity. We propose the use of a control function approach to overcome the econometric issue inherent to the two-stage approach commonly used in the literature. Estimations are conducted separately for four industry groups, defined by technological intensity, to allow for non-uniform effects of agglomeration economies ...
Following reunification, productivity in eastern Germany grew rapidly. A strong industrial sector is key to a thriving German economy. However, the narrowing of the industrial productivity gap between eastern and western Germany has come to a standstill since the financial and economic crisis and the gap remains considerable today. Nevertheless, when comparing similar regions in eastern and western ...