TY  - JOUR
A1  - Kritikos, Alexander
A1  - Schiersch, Alexander
A1  - Stiel, Caroline
T1  - The productivity shock in business services
JF  - Small business economics
N2  - In Germany, the productivity of professional services, a sector dominated by SME, declined by 40 percent between 1995 and 2014. Similar developments can be observed in several other European economies. Using a German dataset with 700,000 firm-level observations, we analyze this largely undiscovered phenomenon in professional services, the fourth largest sector of the business economy in the EU-15, which provides important inputs to the economy and has experienced substantial growth in both output and employment since the turn of the millennium. We find that changes in the value chain explain about half of the decline and that increases in part-time employment account for another small part. Contrary to expectations, the entry of micro and small firms is not responsible for the decline, despite their lower productivity levels. Further, we cannot confirm the conjecture that weakening competition has led to an increase in the number of unproductive firms remaining in the markets and that this has led to a lower average productivity.
KW  - business services
KW  - labor productivity
KW  - productivity slowdown
Y1  - 2022
U6  - https://doi.org/10.1007/s11187-022-00625-6
SN  - 0921-898X
SN  - 1573-0913
VL  - 59
IS  - 3
SP  - 1273
EP  - 1299
PB  - Springer Science + Business Media B.V.
CY  - Dordrecht
ER  - 
TY  - RPRT
A1  - Kritikos, Alexander
A1  - Schiersch, Alexander
A1  - Stiel, Caroline
T1  - The productivity puzzle in business services
T2  - CEPA Discussion Papers
N2  - In Germany, the productivity of professional services, a sector dominated by micro and small firms, declined by 40 percent between 1995 and 2014. This productivity decline also holds true for professional services in other European countries. Using a German firm-level dataset of 700,000 observations between 2003 and 2017, we analyze this largely uncovered phenomenon among professional services, the 4th largest sector in the EU15 business economy, which provide important intermediate services for the rest of the economy. We show that changes in the value chain explain about half of the decline and the increase in part-time employment is a further minor part of the decline. In contrast to expectations, the entry of micro and small firms, despite their lower productivity levels, is not responsible for the decline. We also cannot confirm the conjecture that weakening competition allows unproductive firms to remain in the market.
T3  - CEPA Discussion Papers - 37 
KW  - business services
KW  - labor productivity
KW  - productivity slowdown
Y1  - 2021
U6  - http://nbn-resolving.de/urn/resolver.pl?urn:nbn:de:kobv:517-opus4-514536
SN  - 2628-653X
IS  - 37
ER  -