Bulgaria: Selected Issues

IMF Staff Country Reports, March 22, 2019

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Bulgaria: Selected Issues

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Bibliographic details

• Published: March 22, 2019
• Series: IMF Staff Country Reports
• DOI: https://doi.org/10.5089/9781498304696.002

Main findings on productivity

• Firms with a higher share of innovative assets and lower financial distress are estimated to have higher productivity growth.
• Foreign, larger, and younger firms and firms in the tradable sectors also generally had faster productivity growth.
• The convergence of productivity to frontier firms may have slowed after the global financial crisis for existing firms.
• Evidence points to technological convergence for both total factor productivity and labor productivity to industry leaders. The result is robust with the coefficient statistically significant at the 1 percent level in all specifications.

Evidence and empirical patterns

• Firm-level data analysis underpins the findings on productivity growth, convergence dynamics, and the role of firm characteristics.
• Convergence dynamics: slower convergence after the global financial crisis is highlighted specifically for existing firms.
• Productivity concepts referenced explicitly: total factor productivity and labor productivity converging to industry leaders.

Policy recommendations and implications

• Support R&D and innovation to raise productivity growth.
• Improve the business environment through stronger institutions to:
  • improve company profitability and financial health,
  • raise investment,
  • attract more foreign direct investment.
• Reduce debt service burden to alleviate financial distress and support productivity-enhancing investment.

Structural gaps and priorities

• Bulgaria’s R&D spending lags behind other EU countries and there is ample room for improvement.
• Enhancing the business environment and institutional quality is emphasized as a channel to improve firm performance and aggregate productivity.

Publication metadata

• Publication date: March 22, 2019
• Pages: 33
• Volume: 2019
• Issue: 084
• Series: Country Report No. 2019/084
• DOI: https://doi.org/10.5089/9781498304696.002
• Stock No: 1BGREA2019002
• ISBN: 9781498304696
• ISSN: 1934-7685

International Monetary Fund. Bulgaria: Selected Issues.

Content in this bundle

• Bulgaria: Selected Issues; IMF Country Report No. 19/84; March 4, 2019
  • Bulgaria: Selected Issues; IMF Country Report No. 19/84; March 4, 2019 (Markdown version)
  • Bulgaria: Selected Issues; IMF Country Report No. 19/84; March 4, 2019 (PDF)