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Firm Dynamics and Firm-Level Total Factor Productivity in Belgium: Belgium
Author:
Karen Coulibaly
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Series:
Selected Issues Papers
Volume/Issue:
Volume 2025: Issue 022
Language:
English
Publication Date:
26 Mar 2025
DOI:
https://doi.org/10.5089/9798229005364.018
ISBN:
9798229005364
ISSN:
2958-7875
Pages:
16
Keywords:
Firm entry/exit barriers; firm productivity; misallocation; access to finance; product market regulation; wage formation; firm dynamics; FIRM-LEVEL total factor productivity; productivity development; Total factor productivity; Productivity; Trade barriers; Capital markets; Europe
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IMF Selected Issues Papers are prepared by IMF staff as background documentation for periodic consultations with member countries. It is based on the information available at the time it was completed.
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Belgium’s total factor productivity (TFP) growth slowdown since the late 1990s has been worse than peers’ despite significant spending on innovation. This is largely explained by subdued business dynamics, insufficient firm access to financing, labor and capital misallocation, and the predominance of small firms. Further product-market reforms to reduce barriers to entry and lower exit costs are needed to raise TFP. Reforming the wage-setting mechanism to better align wage and productivity developments would improve labor allocation. Deepening the European single market and advancing the capital market union would contribute to higher Belgian firm productivity and facilitate firm scale up.
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Cover Selected Issues Papers
Selected Issues Papers
Publisher:
International Monetary Fund