SUPERSTAR FIRMS AND LABOUR SHARE DECLINE: THE ROLE OF DIGITALIZATION IN FRANCE, GERMANY, ITALY, AND SPAIN

• Authors: Oleš Tomáš
• Languages of publication: EN

Abstracts

EN

This paper examines how market concentration and firm size interact with labour productivity, wages, and labour share in four European economies – France, Germany, Italy, and Spain – through the lens of the superstar firm hypothesis. Using aggregated firm-level data from CompNet and digitalization indicators derived from EU-KLEMS, the analysis reveals that labour share exhibits a robust negative and non-linear relationship with total factor productivity, consistent with the idea that high-productivity superstar firms allocate a smaller share of value added to labour. At the industry level, a clear positive association emerges between market concentration and both labour productivity and wages, while concentration correlates negatively with labour share. Within industries, firm size is also positively linked to labour productivity and wages but negatively linked to labour share. Although digital capital investments substantially increase productivity and wages among firms in the top size quintiles, these digitalization indicators show no significant moderating or accelerating effect on labour share declines. The findings suggest that the benefits of digitalization tend to accrue disproportionately to larger, frontier firms, while labour share continues to erode alongside rising productivity and concentration.

Keywords

EN

SUPERSTAR FIRMS; DIGITALIZATION; LABOUR PRODUCTIVITY; LABOUR SHARE; FRANCE; GERMANY; ITALY; SPAIN

• Publisher: Institute of Slovak and World Economics and Institute for Forecasting, Slovak Academy of Sciences
• Journal: Ekonomický časopis (Journal of Economics)
• Year: 2024
• Volume: 72
• Issue: 9-10
• Pages: 419 – 439

Contributors

author

Oleš Tomáš

• University of Economics in Bratislava, Faculty of Economics and Finance, Dolnozemská cesta 1/b, 852 35 Bratislava, Slovak Republic

• https://orcid.org/0000-0002-2828-6608

Identifiers

DOI

https://doi.org/10.31577/ekoncas.2024.09-10.01