{
  "title": "Firm Dynamics and Firm-Level Total Factor Productivity in Belgium: Belgium",
  "publication": "Selected Issues Papers, March 26, 2025",
  "sourceUrl": "https://www.imf.org/en/publications/selected-issues-papers/issues/2025/03/25/firm-dynamics-and-firm-level-total-factor-productivity-in-belgium-belgium-565575",
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  "summary": "Belgium’s total factor productivity (TFP) growth slowdown since the late 1990s has been worse than peers’ despite significant spending on innovation.",
  "sections": [
    {
      "heading": "Summary",
      "content": "- Belgium’s total factor productivity (TFP) growth slowdown since the late 1990s has been worse than peers’ despite significant spending on innovation.\n- This is largely explained by subdued business dynamics, insufficient firm access to financing, labor and capital misallocation, and the predominance of small firms."
    },
    {
      "heading": "Major findings",
      "content": "- Subdued business dynamics are a key driver of weak firm-level productivity.\n- Insufficient firm access to financing constrains firm growth and scaling.\n- Labor and capital misallocation reduce aggregate productivity gains.\n- The predominance of small firms limits productivity improvements despite innovation spending."
    },
    {
      "heading": "Policy recommendations",
      "content": "- Further product-market reforms to reduce barriers to entry and lower exit costs are needed to raise TFP.\n- Reform the wage-setting mechanism to better align wage and productivity developments to improve labor allocation.\n- Deepen the European single market and advance the capital market union to contribute to higher Belgian firm productivity and facilitate firm scale up."
    },
    {
      "heading": "Subjects and keywords",
      "content": "- Subject: Capital markets, Financial markets, International trade, Production, Productivity, Total factor productivity, Trade barriers\n- Keywords: access to finance, Capital markets, Europe, firm dynamics, Firm entry/exit barriers, firm productivity, FIRM-LEVEL total factor productivity, misallocation, product market regulation, Productivity, productivity development, Total factor productivity, Trade barriers, wage formation\n\n---\n\n Content in this bundle\n\n- Firm Dynamics and Firm-Level Total Factor Productivity in Belgium\n  - Firm Dynamics and Firm-Level Total Factor Productivity in Belgium (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - Firm Dynamics and Firm-Level Total Factor Productivity in Belgium (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\nSource: https://www.imf.org/en/publications/selected-issues-papers/issues/2025/03/25/firm-dynamics-and-firm-level-total-factor-productivity-in-belgium-belgium-565575"
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    "Authors: Karen Coulibaly",
    "Published: March 26, 2025",
    "Series: Selected Issues Papers",
    "DOI: https://doi.org/10.5089/9798229005364.018",
    "Belgium’s total factor productivity (TFP) growth slowdown since the late 1990s has been worse than peers’ despite significant spending on innovation.",
    "This is largely explained by subdued business dynamics, insufficient firm access to financing, labor and capital misallocation, and the predominance of small firms.",
    "Subdued business dynamics are a key driver of weak firm-level productivity.",
    "Insufficient firm access to financing constrains firm growth and scaling.",
    "Labor and capital misallocation reduce aggregate productivity gains.",
    "The predominance of small firms limits productivity improvements despite innovation spending.",
    "Further product-market reforms to reduce barriers to entry and lower exit costs are needed to raise TFP.",
    "Reform the wage-setting mechanism to better align wage and productivity developments to improve labor allocation.",
    "Deepen the European single market and advance the capital market union to contribute to higher Belgian firm productivity and facilitate firm scale up.",
    "Subject: Capital markets, Financial markets, International trade, Production, Productivity, Total factor productivity, Trade barriers",
    "Keywords: access to finance, Capital markets, Europe, firm dynamics, Firm entry/exit barriers, firm productivity, FIRM-LEVEL total factor productivity, misallocation, product market regulation, Productivity, productivity development, Total factor productivity, Trade barriers, wage formation",
    "**Firm Dynamics and Firm-Level Total Factor Productivity in Belgium**"
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