Publication: Paths of Productivity Growth in Poland: A Firm-Level Perspective
Loading...
Published
2021-10-31
ISSN
Date
2022-03-01
Author(s)
Editor(s)
Abstract
After a long period of economic transformation that included introducing a series of market-oriented reforms and joining the European Union (EU), Poland was one of the fastest-growing economies in the world by 2020. This report investigates differences in productivity dynamics across economic segments and attempts to derive policy recommendations to improve the Polish economy’s productivity performance. First, the authors estimate firm-level total factor productivity (TFP), compute labor productivity indices, and analyze the main productivity patterns between 2009 and 2019. Second, the authors decompose aggregate productivity performance into the within, between, and net entry components using the Melitz Polanec decomposition method to understand the underlying response behind the observed productivity growth in Polish sectors and industries. The efficiency of resource allocation (measured by the between effect) worsened over time in manufacturing and was responsible for the sector’s productivity slowdown while allocative efficiency gains improved productivity performance in construction and services. To boost Polish productivity, the empirical evidence provided in the report indicates certain areas for policy actions as well as a few directions for necessary further investigation.
Link to Data Set
Citation
“World Bank. 2021. Paths of Productivity Growth in Poland: A Firm-Level Perspective. © World Bank. http://hdl.handle.net/10986/37047 License: CC BY 3.0 IGO.”
Digital Object Identifier
Associated URLs
Associated content
Other publications in this report series
Journal
Journal Volume
Journal Issue
Related items
Showing items related by metadata.
Publication Poland - Convergence to Europe : The Challenge of Productivity Growth - Investment Climate Assessment(World Bank, 2010-01-01)Improving the investment climate is a key pillar of the World Bank's private sector development strategy. Without a good investment climate, firms and entrepreneurs of all types-from farmers to micro-enterprises to local manufacturing concerns and multinationals-have few opportunities and incentives to invest productively, create jobs, and expand, enter and remain in the formal economy, and thereby contribute to growth and poverty reduction. Growth and private sector development encompass a very broad agenda, but in Poland's case such a challenge boils down to the objective of reducing the convergence time to the standard of living of the European Union (EU)-15 countries. Sound macroeconomic policy, debt sustainability, open trade, security, access to finance, good governance and quality infrastructure services are all key requirements for the private sector to flourish. These conditions need to be complemented by micro-economic reforms-the policies and institutions that support efficient private economic activity-that help to unleash competitive forces leading to increased productivity and competitiveness. The Poland Investment Climate Assessment (ICA) is the first ICA piloted in the World Bank's Europe and Central region in 2004, adding to the stock of knowledge from the many other country reports prepared worldwide. The Poland ICA provides benchmark data to assess firm-level performance in other countries in the Europe and Central Asia region. The report also analyses Poland's strengths and weaknesses in the context of a regional comparison, with the EU-8 countries, which recently joined the European Union, the cohesion countries, and the other EU member countries.Publication Unlocking Firm Level Productivity and Promoting More Inclusive Growth(World Bank, Washington, DC, 2016-01)Rapid and consistent economic growth of Ethiopia over the past decade has contributed to reducing the number of people living in poverty. The Government of Ethiopia has created the growth and transformation plan (GTP), focusing on two overarching themes: fostering competitiveness and employment, and enhancing resilience and reducing vulnerabilities. This plan recognizes that for poverty reduction and economic growth to be sustainable, the Ethiopian economic structure will have to undergo a fundamental transformation. In accordance with a focus on poverty reduction and economic growth, the GTP has identified five main levers for change: public sector investment in infrastructure to lay the ground for private sector development, enhancement of policies and regulations to provide an environment conducive to competitiveness and productivity, expanding access to credit for small and medium size enterprises, provision of training and education to augment the supply of skilled labor, and improved access to land. Technological adoption and innovation will play a crucial role in delivering the goals laid out in the GTP. Participation in foreign markets also induces firms to become more innovative, a phenomenon known as learning through exporting, as observed among Ethiopian leather exporters. Another vital determinant of innovative activity is the accumulation of human capital and the skill level of the workforce. This study seeks: (i) to empirically analyze the extent of innovative activities that formal firms are undertaking in Ethiopia; (ii) to conduct a review of the existing innovation landscape; and (iii) to identify opportunities to foster innovations at the base of the pyramid (BoP) in Ethiopia. This study is structured as follows: chapter one gives introduction. Chapter two provides a detailed overview of the characteristics of growth and innovation, by providing key insights based on the enterprise survey analysis on the characteristics, motivations, operational and market environment and constraints of the innovators in Ethiopia. Chapter three assesses the innovation landscape in Ethiopia, by looking at the governmental and private agencies responsible to promote innovation, as well as active programs, and donor initiatives which may play a role in promoting firm level and pro-poor innovations. Chapter four provides policy recommendations to promote innovation in Ethiopia both at the firm level and in the form of pro-poor initiatives.Publication Productivity versus Endowments : A Study of Singapore's Sectoral Growth, 1974-92(World Bank, Washington, DC, 2001-11)Productivity, and the Rybczynski effects of factor endowments, have been highlighted as the two main reasons behind the growth of newly industrializing economies in East Asia. However, empirical studies at the aggregate level, do not find support for these claims. Focusing on Singapore's manufacturing industries, the author estimates the contributions of productivity, and factor endowments to sectoral growth. The results show that both are important. But productivity is more important as a source of growth in the electronics industry, while factor endowments make a larger contribution in other industries.Publication Structural Transformation and Productivity Growth in Africa(World Bank, Washington, DC, 2015-12)Uganda’s economy underwent significant structural change in the 2000s whereby the share of non-tradable services in aggregate employment rose by about 7 percentage points at the expense of the production of tradable goods. The process also involved a 12-percentage-point shift in employment away from small and medium enterprises and larger firms in manufacturing and commercial agriculture mainly to microenterprises in retail trade. In addition, the sectoral reallocation of labor on these two dimensions coincided with significant growth in aggregate labor productivity. However, in and of itself, the same reallocation could only have held back, rather than aid, the observed productivity gains. This was because labor was more productive throughout the period in the tradable goods sector than in the non-tradable sector. Moreover, the effect on aggregate labor productivity of the reallocation of employment between the two sectors could only have been reinforced by the impacts on the same of the rise in the employment share of microenterprises. The effect was also strengthened by a parallel employment shift across the age distribution of enterprises that raised sharply the employment share of established firms at the expense of younger ones and startups. Not only was labor consistently less productive in microenterprises than in small and medium enterprises and larger enterprises across all industries throughout the period, it was also typically less productive in more established firms than in younger ones.Publication Stylized Facts on Productivity Growth : Evidence from Firm-level Data in Croatia(World Bank Group, Washington, DC, 2014-07)Drawing on a representative sample of firms, this paper presents some microeconomic evidence on the productivity growth process in Croatia since the onset of recession (2008-12). Four types of results are highlighted. First, there is a persistent (and increasing) heterogeneity in the performance of Croatian firms along outcome measures. Second, Croatia lags behind regional peers in entrepreneurship measures, which suggests a comparatively lower economic dynamism. Third, the lack of dynamism displayed by the Croatian economy is confirmed when looking at the firm entry and exit process: the analytical results point to reduced firm dynamism compared with Croatia's peers in Europe and Central Asia. Fourth, the contribution of net entry to overall productivity growth in Croatia is surprisingly negative. This is contrary to what would be expected based on the literature and suggests that the process of "destructive creation" in Croatia has not been efficient, as the market might be eliminating firms that are potentially productive. Policies that foster market contestability should be pursued, especially policies aiming at better product market regulation (such as liberalization of entry into the service sector, particularly retail and infrastructure). Measures to help finance entrepreneurship (in promising sectors) should be used to support enhancements in firm productivity. In addition, appropriate bankruptcy rules play a key role by easing the exit process and allowing low-productive units to leave the market and free resources that can be better used by other, more efficient, firms.
Users also downloaded
Showing related downloaded files
Publication Poverty and Equity Assessment for El Salvador 2024(Washington, DC: World Bank, 2024-12-12)This report proposes an agenda for building on gains to re-accelerate poverty reduction among Salvadorans. The last World Bank Poverty Assessment for El Salvador, from 2015, proposed two key policy recommendations: (a) effective pro-poor spending and (b) reduction of crime and violence through better access to jobs and education. Nine years later, the authorities have managed to achieve a substantial reduction in crime and violence and have indicated an intent to build on such progress to establish a path toward an El Salvador where shared prosperity is achievable. In this report, we propose a three pillar structure to address poverty and inequality reduction: jobs, services, and social protection, with a cross-cutting set of primary conditions that articulates this structure.Publication Panama Poverty and Equity Assessment 2024(Washington, DC: World Bank, 2025-02-12)Panama has been one of the fastest-growing countries in the region, with rapid economic expansion accompanied by significant poverty reduction. Driven by public and private investment as well as labor accumulation, the Panamanian economy grew by an annual average of 5.7 percent between 1990 and 2023, much higher than the regional average of 2.5 percent. This growth contributed to a significant reduction in poverty. Using the poverty line of US$6.85 per day per capita (2017 PPP), the share of Panamanians affected by poverty improved from one in two in 1989 to only one in ten lived in 2023. Nevertheless, Panama remains one of the most unequal countries in the world. While poverty in urban areas was 4.8 percent in 2023, poverty in indigenous regions (comarcas) reached 76 percent—15 times higher. Limited progress in reducing inequality, as measured by the Gini coefficient, contrasts with Panama’s achievements in other areas. Globally, Panama ranked 11th in inequality in 2000, with a Gini coefficient of 53.8. Two decades later, it ranked 8th, with a Gini coefficient of 50.9 as of 2022. This report examines Panama’s achievements and challenges in reducing poverty and inequality to inform policy options. With a special focus on the 2008–2023 period the report documents progress in poverty and equity in recent decades, highlighting access to basic services, expansion of quality jobs, improvement of human capital, and promotion of household resilience as critical policy priorities.Publication Digital Africa(Washington, DC: World Bank, 2023-03-13)All African countries need better and more jobs for their growing populations. "Digital Africa: Technological Transformation for Jobs" shows that broader use of productivity-enhancing, digital technologies by enterprises and households is imperative to generate such jobs, including for lower-skilled people. At the same time, it can support not only countries’ short-term objective of postpandemic economic recovery but also their vision of economic transformation with more inclusive growth. These outcomes are not automatic, however. Mobile internet availability has increased throughout the continent in recent years, but Africa’s uptake gap is the highest in the world. Areas with at least 3G mobile internet service now cover 84 percent of Africa’s population, but only 22 percent uses such services. And the average African business lags in the use of smartphones and computers as well as more sophisticated digital technologies that catalyze further productivity gains. Two issues explain the usage gap: affordability of these new technologies and willingness to use them. For the 40 percent of Africans below the extreme poverty line, mobile data plans alone would cost one-third of their incomes—in addition to the price of access devices, apps, and electricity. Data plans for small- and medium-size businesses are also more expensive than in other regions. Moreover, shortcomings in the quality of internet services—and in the supply of attractive, skills-appropriate apps that promote entrepreneurship and raise earnings—dampen people’s willingness to use them. For those countries already using these technologies, the development payoffs are significant. New empirical studies for this report add to the rapidly growing evidence that mobile internet availability directly raises enterprise productivity, increases jobs, and reduces poverty throughout Africa. To realize these and other benefits more widely, Africa’s countries must implement complementary and mutually reinforcing policies to strengthen both consumers’ ability to pay and willingness to use digital technologies. These interventions must prioritize productive use to generate large numbers of inclusive jobs in a region poised to benefit from a massive, youthful workforce—one projected to become the world’s largest by the end of this century.Publication Poverty and Shared Prosperity 2022(Washington, DC : World Bank, 2022)Poverty and Shared Prosperity 2022: Correcting Course provides the first comprehensive analysis of the pandemic’s toll on poverty in developing countries. It identifies how governments can optimize fiscal policy to help correct course. Fiscal policies offset the impact of COVID-19 on poverty in many high-income countries, but those policies offset barely one quarter of the pandemic’s impact in low-income countries and lower-middle-income countries. Improving support to households as crises continue will require reorienting protective spending away from generally regressive and inefficient subsidies and toward a direct transfer support system—a first key priority. Reorienting fiscal spending toward supporting growth is a second key priority identified by the report. Some of the highest-value public spending often pays out decades later. Amid crises, it is difficult to protect such investments, but it is essential to do so. Finally, it is not enough just to spend wisely - when additional revenue does need to be mobilized, it must be done in a way that minimizes reductions in poor people’s incomes. The report highlights how exploring underused forms of progressive taxation and increasing the efficiency of tax collection can help in this regard. Poverty and Shared Prosperity is a biennial series that reports on global trends in poverty and shared prosperity. Each report also explores a central challenge to poverty reduction and boosting shared prosperity, assessing what works well and what does not in different settings. By bringing together the latest evidence, this corporate flagship report provides a foundation for informed advocacy around ending extreme poverty and improving the lives of the poorest in every country in the world. For more information, please visit worldbank.org/poverty-and-shared-prosperity.Publication Mobility and Development Periodical, Fall 2024(Washington, DC: World Bank, 2024-10-01)The fourth edition of the Mobility and Development periodical presents nine stories of how countries have evolved transport sector innovations, policy reform, and technical solutions to improve the quality of life. Opening with big data readiness for urban transport in Latin America, the narrative zooms out to present the potential of drones in the region. After unpacking the fiscal risks of the transport sector, experts unpack pressing urban mobility challenges. Dhaka offers an example of how critical governance can help metropolitan transit agencies deliver value. Keeping inclusion in focus, the next article shows how effective public transportation can boost economic opportunities for women in Middle East and North Africa. Moving to the Europe and Central Asia region offers a perspective of how improved roads influence jobs in rural Armenia. Travelling to Pakistan, authors discuss how to accelerate electric mobility adoption. The final article shows how an economic corridor approach to harness lithium could transform Argentina’s northwest.