Competitiveness Research Network

CompNet news

The 12th conference of the Competitiveness Research Network (CompNet), jointly organised with the European Central Bank and the Czech National Bank, will be held in Prague on 21-22 April 2016. The topic will be “Productivity and External Rebalancing”. Final program to be available in a few days.

12th conference of the Competitiveness Research Network: Productivity and External Rebalancing

The Competitiveness Research Network (CompNet) of the European System of Central Banks (ESCB) functions as a forum in which to discuss different approaches to, and measures of, competitiveness.

Its main activities include the regular updating of its micro-based competitiveness database for 17 EU countries, and research on competitiveness, productivity enhancement and resource reallocation, including macro assessment and the role of the global value chain.

About the Network

CompNet is a network of researchers that is led and guided by a steering committee composed of:

Chairman Filippo di Mauro
Steering Committee Carlo Altomonte (external consultant, Bocconi University)
João Amador (Banco de Portugal)
Eric Bartelsman (external consultant, Vrije Universiteit Amsterdam)
Konstantins Benkovskis (Latvijas Banka)
Antoine Berthou (Banque de France)
Matteo Bugamelli (Banca d’Italia)
Ettore Dorrucci (ECB)
Pavlos Karadeloglou (ECB)
Paloma López-Garcia (ECB)
Contact compnet@ecb.europa.eu
Research focus

CompNet’s purpose is to:

  • strengthen the analytical framework for assessing competitiveness
  • identify what drives the dynamics of competitiveness and productivity in EU countries and firms
  • relate competitiveness indicators with aggregate outcomes (e.g. exports, economic growth).

CompNet began operating in 2012 and since then has provided a substantial contribution of novel research.

The ultimate objective of CompNet is to identify the structural factors that contribute to raising the economy’s long-term growth potential, by effectively linking instruments, mechanisms and outcomes. To do so, CompNet has developed a set of novel indicators and a comprehensive firm-level database, and has undertaken original research.

CompNet members have published more than 40 papers both in the ECB’s Working Paper Series and in a number of journals.


CompNet schema: Micro level, Macro level, Cross-border level

Three main areas have been investigated in order to provide policy recommendations: trade and competitiveness, shock transmission in a global context and resource allocation and productivity.

Trade and competitiveness

CompNet’s analyses offer an in-depth and comprehensive explanation for recent trade developments that goes beyond the usual practice of relying heavily on measures of price and cost competitiveness.

Books
  • Di Mauro, F. and Ronchi, M. (2015), “Assessing competitiveness in an increasingly borderless world”, in Investment and Investment Finance in Europe, Chapter 7, European Investment Bank.
Shock transmission in a global context

Given the persistent imbalances in the EU, researchers have investigated a number of channels through which cross-border shocks are transmitted, drawing from the CompNet database.

Research Papers
No. 1833
15 Jul 2015
The great collapse in value added trade
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No. 1801
09 Jun 2015
The exchange rate, asymmetric shocks and asymmetric distributions
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No. 1720
19 Aug 2014
Export dynamics and sales at home
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No. 1412
04 Jan 2012
Global value chains during the great trade collapse: a bullwhip effect?
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Resource allocation and productivity

Nominal frictions are often a source of resource misallocation that can ultimately impact growth. CompNet research has helped gain an understanding of the effects that distortionary policies have on growth via productivity.

Research Papers
No. 1764
16 Mar 2015
Assessing European competitiveness: the new CompNet microbased database
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No. 1761
09 Mar 2015
Global value chains: a view from the euro area
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Firm-level-based database

CompNet has created an EU firm-level-based database. The dataset is unique in terms of its coverage and cross-dimensional analysis potential as it links, for example, trade or the financial status of firms with their productivity.

To preserve the confidentiality of firm-level information and to improve cross-country comparability, CompNet has adopted the “distributed micro-data approach” as developed by Bartelsman et al. (2004). In this approach a common methodology is used to:

Micro data - Country teams expertise - ECB Data harmonization and preparation
  • extract information from existing firm-level datasets available within each National Central Bank (NCB) or National Statistics Institute (NSI)
  • aggregate indicators at industry, macro-sector and country level to resolve confidentiality issues
  • harmonise the resulting set of indicators across countries in terms of the definition of measurements and the treatment of outliers, deflators and Purchsing Power Parities (PPPs).

The final outcome is a wide range of indicators, based on micro-level data, which can be used systematically to analyse competitiveness-related issues.

Available indicators by area of research

Productivity

CompNet provides a large set of the most widely recognised indicators to analyse productivity trends and levels over time. These indicators allow researchers to take country-specific snapshots, study productivity divergence across EU countries, and gain a better understanding of the causes behind the resource allocation process.

Productivity indicators include:

  • Labour productivity
  • Real value added
  • Total factor productivity (TFP)
  • Marginal product of labour and capital
  • Olley and Pakes gap (OP gap)
Financial

CompNet financial indicators provide extensive information regarding the financial and financing condition of firms.

Financial indicators include:

  • Leverage
  • Return on assets (ROA)
  • Capital depreciation (and growth)
  • Indicator of credit constraints
  • Cash flow ratio
Trade

CompNet trade indicators enable researchers to focus on the linkage between firms’ international activities and productivity.

Trade indicators include:

  • Share of exporting firms
  • Export value
  • Export ratio
  • Export value added
  • Correlation of firms' characteristics with export value
Markup

CompNet provides a large set of indicators of market competition and its dynamics over time.

Markup indicators indlude:

  • Price-cost margin
  • Market share
  • Concentration ratio for the 10 largest firms
  • Herfindahl-Hirschman index
Labour

CompNet labour indicators allow researchers to analyse employment dynamics at a granular level. In constructing the database, CompNet traced firms’ growth over time.

Labour indicators include:

  • Number of employees
  • Labour cost
  • Unit labour cost
  • Wage share
  • Employment change
Past CompNet events
CompNet conference, 25-26 June 2015

The CompNet conference on “Enhancing competitiveness and fostering sustainable growth: Methodological issues and empirical results” took place at the European Central Bank in Frankfurt in June 2015 and has brought together top level academics, researchers and central bankers.

For the material from other events please contact compnet@europa.ecb.eu.