Kaia Philips

Firm Demographics and Productivity Dynamics in Estonia

This paper presents one of the first studies of firm demographics in Estonia, particularly, on the processes of firm entry and exit as well as survival analysis of new firms. Also decompositions of productivity change into components consisting of resource reallocation, firm entry and exit, and productivity growth within continuing firms is carried out. Our results, derived from a novel database of the population of Estonian firms, show that firm turnover has been rather high in Estonia during the observed period from 1995 to 2001, resulting from low institutional entry barriers and emergence of the SME sector. The high survival rates for new firms and surviving firms’ relatively fast growth could reflect their relatively high productivity compared to incumbent firms and changes in the sectoral structure of the economy. The decomposition of productivity change shows that the high productivity growth has been mostly from within-firm productivity growth (e.g. the adoption of new production technologies and organizational changes), but the reallocation of production factors (especially the exit of low productivity units) has played an important role as well.

Where Have all the Jobs Gone? Gross Job Flows in Estonia

This paper documents and analyses gross job flows and their determinants in Estonia over the years 1995–2001, using a unique database from the Estonian Business Registry. This database contains all (including also micro and small firms) officially registered firms in Estonia, the total number being almost 52,000. There are several important findings in the paper. Our results show that job flows (job creation and job destruction rates) have been extremely high in Estonia and are comparable to the levels documented for the US. These rates have not decreased recently, although worker flows (transitions between labour market states) have dropped. We also found that the firm-specific component in job flows excess of employment change had relatively lower importance than in western studies due to the emergence of small and medium-sized enterprises and labour reallocation between the economic sectors. The high inter-sectoral mobility has helped maintain high levels of job flows, while both are high also due to a favourable institutional environment, especially due to low start-up costs and a large share of micro enterprises in Estonia.

The Impact of Interfirm Labor Mobility on Innovation: Evidence from Job Search Portal Data

Mobility of workers is one of the most important channels of knowledge spillovers between firms. In this study, we look at the relationships between interfirm labor mobility and technological innovation at firm level. For the analysis of labor mobility, we use a novel Estonian database from an online job search portal that includes detailed data on occupations and education. The employee level data is matched with the Community Innovation Survey data on business enterprises. We estimate various specifications of the knowledge production functions augmented using mobility indicators. In particular, the results indicate that product innovations and total factor productivity are associated with subsequent higher worker flows from other, especially innovative, firms. Among flows involving people in different occupations, the flows of managers and professionals and technicians are more important.