Productivity difference between a foreign direct investment and domestic capital firms in Latvia in the agricultural, forestry and fishing sector: A firm-level analysis
2023
Jursa, Aleksejs
This study examines firm-level panel data to determine the productivity level per employee between domestic capital firms and their foreign counterparts in the agricultural, forestry and fishing sector in Latvia during the 2014–2021 period. Two groups of firms were created. The first firm group represents firms in which at least 10% of the share capital belongs to foreign direct investors. While the second group represents firms whose share capital is fully owned by the residents of Latvia. Productivity indicators are calculated for both groups. To assess the productivity differences across domestic firms and firms with foreign capital in Latvia, the author has combined a rich firm-level dataset using ORBIS and Lursoft IT Ltd. data. Based on the results, it can be concluded that the firms with foreign capital are, on average, more productive than the firms whose share capital is only Latvian capital. The difference in productivity is especially visible in the forestry and logging sub-group in small size firms.
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Editeur Latvia University of Life Sciences and Technologies
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