Determinants of labour productivity in Malta: Evidence from a firm-level survey

Abstract

Labour productivity in Malta has been sluggish after the crisis. This study looks at the determinants of productivity in Malta by exploiting information from a unique firm-level survey using an empirical multivariate framework. Labour productivity is more likely to be lower in firms with a higher labour share, suggesting that the significant shift towards labourintensive services observed in recent years is likely to be an important driver behind the slowdown in productivity. Outsourcing and the characteristics of the workforce are also important determinants. On the contrary, credit constrained firms and those hit by adverse demand conditions are less likely to experience an improvement in productivity.