Micro-based evidence of EU competitiveness: The CompNet Database. National Bank of Belgium Working Paper No. 253, March 2014

Drawing from confidential firm-level balance sheets in 11 European countries, the paper presents a novel sectoral database of comparable productivity indicators built by members of the Competitiveness Research Network (CompNet) using a newly developed research infrastructure. Beyond aggregate information available from industry statistics of Eurostat or EU KLEMS, the paper provides information on the distribution of firms across several dimensions related to competitiveness, e.g. productivity and size. The database comprises so far 11 countries, with information for 58 sectors over the period 1995-2011. The paper documents the development of the new research infrastructure, the construction of the database, and shows some preliminary results. Among them, it shows that there is large heterogeneity in terms of firm productivity or size within narrowly defined industries in all countries. Productivity, and above all, size distribution are very skewed across countries, with a thick left-tail of low productive firms. Moreover, firms at both ends of the distribution show very different dynamics in terms of productivity and unit labour costs. Within-sector heterogeneity and productivity dispersion are positively correlated to aggregate productivity given the possibility of reallocating resources from less to more productive firms. To this extent, we show how allocative efficiency varies across countries, and more interestingly, over different periods of time. Finally, we apply the new database to illustrate the importance of productivity dispersion to explain aggregate trade results.

Paradoxes of stabilisation. Bosnia and Herzegovina from the perspective of Central Europe. OSW Report, March 2016

On 15 February 2016 Bosnia and Herzegovina applied for membership of the European Union. This was the result of the new policy strategy which the EU introduced in 2014, aimed at unblocking BiH’s integration process and encouraging local elites to accelerate the reform process. Despite a formal application to the EU, the main internal problems of BiH remain the same - local politicians focus more on the power struggle and enhancing ethnic division than on reform and this is hampering the economic development of one of the poorest countries in Europe. For these reasons this report is devoted to analysing the internal challenges to the stability, coherence and unity of the country. Special attention was also placed on examining the interest and strategies of the various international actors since they can hinder or support the reform process.