Manuel García Santana, Josep Pijoan-Mas, Enrique Moral-Benito, Roberto Ramos, (2016), “Growing like Spain: 1995-2007”, Voxeu, 23 May
Spain enjoyed substantial growth in the decade prior to the Global Crisis, despite declining aggregate productivity. Recent research blames the poor productivity on different forms of a ‘financial resource curse’. This column argues that resource misallocation was particularly severe due to corruption and crony capitalism. This suggests future growth will require serious political reforms. Given that reallocation of resources across sectors accounts only for a small portion of TFP decline during 1995-2007, we are left with the hypothesis of a worsening in the allocation of resources across firms within sectors. To investigate this, we use firm-level administrative data (Central Balance Sheet Data or Central de Balances Integrada (CBI) in Spanish) of around 350,000 firms per year in manufacturing, construction, trade, and services for the period 1995-2007. Slicing the data into 518 4-digit industries, we document two patterns.
Relevant posts
- Bozio, Antoine, Emmerson, Carl, Peichl, Andreas, Tetlow, Gemma, (2015), “European Public Finances and the Great Recession: France, Germany, Ireland, Italy, Spain and the United Kingdom Compared”, Institute for Fiscal Studies, Volume 36, Issue 4, 2015
- Montalvo, J.G. (2014) “Any hope that a revival of Spain’s housing market could help kick-start the country’s economy is likely to prove misplaced”, LSE EUROPP, 06 November