Correa, PauloIootty, MarianaRadas, SonjaSkrinjaric, Bruno2014-08-152014-08-152014-07https://hdl.handle.net/10986/19387Drawing 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.en-USCC BY 3.0 IGOADVERTISINGAGGREGATE PERFORMANCEAGGREGATE PRODUCTIVITYAGGREGATE PRODUCTIVITY GROWTHAGRICULTUREBANKRUPTCYBENCHMARKINGBRANCHBUSINESS ACTIVITIESBUSINESS ASSOCIATIONSBUSINESS ECONOMICSBUSINESS ENTRYCHAMBER OF COMMERCECOMPANYCOMPETITIVENESSCOMPUTERSCONTESTABILITYCREATIVE DESTRUCTIONDEFLATIONDEFLATORSDEVELOPMENT POLICYDIVERSIFICATIONDOMESTIC MARKETE-MAILECONOMIC ACTIVITYECONOMIC DEVELOPMENTECONOMIC EXPANSIONECONOMIC OUTLOOKECONOMIC RESEARCHECONOMIC SECTORSELECTRICITYEMPLOYEEEMPLOYMENTENTREPRENEURSHIPENTRY CONTRIBUTIONENTRY RATEEQUIPMENTEXPORTSFACTOR MARKETSFINANCIAL CRISISFINANCIAL SERVICEFINANCIAL SERVICESFINANCIAL SUPPORTFIRM DYNAMICFIRM DYNAMICSFIRM DYNAMISMFIRM ENTRYFIRM EXITFIRM LEVELFIRM PERFORMANCEFIRM PRODUCTIVITYFIRM SIZEFIRM TURNOVERFIRM-LEVEL PRODUCTIVITYGDPGDP PER CAPITAGLOBAL MARKETSGROSS DOMESTIC PRODUCTGROSS VALUEGROWTH RATEHOLDING COMPANIESICTIDENTIFICATION NUMBERINDUSTRIAL REVOLUTIONINEFFICIENCYINFORMATION SERVICEINNOVATIONINNOVATION PROGRAMINPUT FACTORSINSPECTIONINSTALLATIONINTERNATIONAL COMPETITIONINTERNATIONAL MARKETSINTERNATIONALIZATIONJOB CREATIONLABOR COSTLABOR PRODUCTIVITYLABOURLABOUR COSTLABOUR PRODUCTIVITYLARGE ENTERPRISESLEASINGMANAGEMENT SERVICESMANUFACTURINGMARKET ECONOMIESMARKET ENTRIESMARKET EXITMARKET PRICESMARKET RESEARCHMARKET STRUCTUREMARKETINGMATERIALMEDIUM ENTERPRISESMERGERSMOTION PICTUREMULTINATIONALSNET ENTRY COMPONENTNET ENTRY EFFECTNET JOB CREATIONNEW MARKETNEW MARKETSNEW TECHNOLOGYNORMAL PROFITSOPEN ACCESSOWNERSHIP STRUCTUREPER CAPITA INCOMEPERFORMANCE INDICATORSPERFORMANCE MEASUREPERFORMANCE MEASURESPRELIMINARY EVIDENCEPREVIOUS SECTIONPRIVATE CAPITALPRIVATE FIRMSPRIVATE SECTORPRIVATE SECTOR FIRMSPRODUCT MARKETPRODUCT MARKET REGULATIONPRODUCTION FUNCTIONPRODUCTION FUNCTIONSPRODUCTIVE FIRMSPRODUCTIVITYPRODUCTIVITY DECOMPOSITIONPRODUCTIVITY GAINSPRODUCTIVITY GROWTHPRODUCTIVITY PERFORMANCEPUBLIC ADMINISTRATIONR&DREAL GDPRESULTRESULTSRETAILRETAIL TRADESALESSEARCHSERVICE INDUSTRYSERVICE SECTORSMALL BUSINESSSMALL ENTERPRISESSMALL FIRMSSTATE OWNED ENTERPRISESSURPLUSESTECHNICAL ASSISTANCETELECOMTELECOMMUNICATIONSTELEVISIONTIME PERIODTOTAL EMPLOYMENTTOTAL FACTOR PRODUCTIVITYUSESVALUE ADDEDVIDEOWEBWEB PAGESWHOLESALE TRADEWORK ACTIVITIES10.1596/1813-9450-6990