FIRM PRODUCTIVITY IN THE WESTERN BALKANS: THE IMPACT OF EUROPEAN UNION MEMBERSHIP AND ACCESS TO FINANCE
FIRM PRODUCTIVITY IN THE WESTERN BALKANS: THE IMPACT OF EUROPEAN UNION MEMBERSHIP AND ACCESS TO FINANCE

Summary/Abstract: This study examines the productivity performance of Balkan firms within and outside the European Union (EU), including the influence of loans. A multiple treatment model is used to com-pare the effects on productivity of member-ship and loans both separately and collec-tively, which in the case of loans allows a separate analysis of their influence on firms in non-member states. The use of condition-al quantile regressions measures the effect on productivity of membership and loans separately as treatment variables. This pro-vides an analysis of where the treatment influence is greatest across the distribution curve and identifies the significance of se-lected control variables on the outcome. In the full sample, the findings indicate that EU membership and loans have a positive effect on productivity, with membership be-ing more important than loans. Outside the EU, firms in receipt of loans are more pro-ductive than those without. However, the significance of both membership and loans is restricted to the lower end of the produc-tivity distribution curve. The manufactur-ing sample shows that EU membership has a significant positive effect across 70% of the deciles measured, whilst the influence of loans is restricted to the lower deciles, with rental capital (leasing) also positively significant in the lower four deciles. In the services sector, however, membership is sig-nificant up to 90% of the distribution, with loans at 60%.

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