Of firms and men (december 2019)

Slowdown in convergence in comparison with developed western economies might be caused my inefficient allocation of resources. Misallocation may be driven by inadequate regulation and by sectoral specifics such as lower degree of competition and informality in services. More efficient allocation of resources may increase productivity of Slovak economy by half. Internal firm characteristics such as size, ownership or capital intensity significantly affect productivity of Slovak firms. Foreign firms are significantly more productive than domestic ones. Economic policy measures should focus on elimination of distortive regulations and support adoption of innovative technologies by domestic firms.