Company size drives 75% of productivity gap between Spain and Germany

Company size accounts for approximately 75% of the productivity gap between Spain and Germany, according to BBVA Research. The remaining 25% is attributed to other factors, including the sectoral composition of the economy.

During a session organized by Fedea and the General Council of Economists (CGE), Rafael Doménech, head of Economic Analysis at BBVA Research, noted that the productivity issue is not found in medium and large Spanish companies, which perform similarly to their European counterparts. Instead, the gap is concentrated in small companies, particularly those with fewer than 50 employees.

Data shows that large Spanish companies are roughly twice as productive as micro-enterprises. However, only about 35% of Spanish workers are employed in companies with more than 50 employees, which limits the overall average productivity of the economy. Experts highlighted the importance of managerial human capital and called for reducing regulatory barriers to prevent incentives that encourage companies to remain small.