Business dynamism and the life cycle of firms: a firm-level analysis of Spain

This paper examines Spain’s productivity slowdown, a trend particularly acute since the 2000s. While global productivity stagnation has drawn significant attention, Spain’s experience presents notable divergences from economies such as the USA. In contrast to the USA, where narratives center on declining business dynamism and increasing market concentration, Spain shows no clear evidence of market power consolidation among incumbents. Instead, analysis of firm dynamics uncovers a distinct pattern: mature Spanish firms experience simultaneous declines in size and productivity growth. The study highlights the importance of identifying country-specific barriers—regulatory, financial, or technological—that influence firm performance and aggregate productivity.