Total factor productivity, financial performances and corporate governance: An analysis of the R&D sector in Romania

Abstract
Using firm-level data from 2007 to 2016 for 116 R&D companies located in Romania, the main purpose of this paper is to compute the TFP and to see to what extent the productivity level is influenced by the financial performances and the corporate governance of these firms. To this end, we use several metrics for the TFP computation, relying on Wooldridge (2009), Levinsohn and Petrin (2003), OLS residuals and fixed effect model residuals. Our bootstrap panel quantiles regressions show that firm size and profitability are important for increasing the overall productivity of R&D companies, while the structure of investment and the taxation have no significant effect. In addition, the presence of foreign ownership generates a higher productivity. However, the degree of independence in making decision, and the ownership involvement in the firms’ management, have a negative impact on TFP. While the presence of women on board is important for low-productivity firms only, curiously, the state-owned applied research institutes record a higher productivity compared with the R&D private firms. These findings are robust to different approaches used for the TFP computation, and to the number of iterations used for the confidence intervals.

Author: Claudiu T. ALBULESCU and Camélia TURCU
Volume: 2018.09
Publisher: INFER
Year: 2018
No. of pages: 29
Category: INFER working papers

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