This study is a new installment in the longstanding BBVA Foundation-Ivie research project on productivity and growth in Spain. It looks at the differences in productivity among Spanish companies in the period 2000-2008 (not only labor but total factor productivity, which includes changes in capital use).

Rather than relying on aggregated or sectoral analyses, it uses a panel of approximately three and a half million observations corresponding to over 730,000 companies in 29 sectors. The results indicate that aggregate productivity has declined across sectors of activity and that this negative performance is common to many.

They also show that productivity differences are greater within than between sectors, and that the gaps moreover are markedly persistent. This indicates the potential gains to be harnessed if companies could bring their productivity closer to best practice levels in their sectors.

Improvement in aggregate productivity, and  competitiveness, will require removing barriers to the inter-firm mobility of productive factors and an increase in the market share of more productive companies, especially in the service sector.