Table 4: Names and definitions of variables
|
Name |
Description |
|
Environmentalfactors |
Industry dummies at the 4-digit level |
|
- Location |
District (Kreis) of the headquarter of the |
|
- Year effects |
Dummy variable for each year, 1992-2005 |
|
Firm-specific factors |
Six categories: less then 49 employees (= 1), |
|
- Share in industry |
Relative production share of German suppliers |
|
- R&D intensity |
Share of R&D personnel over total employment |
|
b) Outsourcing activities - Quota of external contract - Quota of external services |
Expenditure for external contract work / internal Expenditure for external services / internal |
|
- Quota of material inputs |
Expenditure for material inputs / internal |
|
- Quota of temporarily - Quota operating leases |
Expenditure for temporary employed labor / |
|
c) Ownership - Type of business - Number of owners |
Manufacturing (= 1) / craft (= 0) dummy variable |
Second, the results suggest that efficiency is largely explained by the industry in which the
firm is operating. The great importance of industry effects is echoed in the literature, which
emphasizes the role of industry in explaining firm profitability (Cubbin and Geroski, 1987;
Schmalensee, 1985). These results are broadly consistent with hypothesis 1. Industry effects
might capture different degrees of competition in the respective markets (Fritsch and Stephan,
2004a) or might accrue from different stages of the industry lifecycle or different technologi-
cal regimes (Fritsch and Stephan, 2004b). The “black box” of industry effects may also have
something to do with the necessity of firms in certain industries to innovate, for example, the
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