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Bank of Greece Economic Bulletin, Issue 52

28/01/2021 - Press Releases

Today, the Bank of Greece published the latest issue of its Economic Bulletin (No. 52/December 2020).


The articles published in the Economic Bulletin reflect the views of the authors and not necessarily those of the Bank of Greece.


Issue 52 features the following four articles:


Constantina Backinezos, Stelios Panagiotou and Evangelia Vourvachaki: “Multiplier effects by sector: an input-output analysis of the Greek economy”

This study presents the output, gross value added and employment multipliers for the Greek economy based on the most recent Input-Output tables of 2015, which were compiled according to the European System of Accounts (ESA) 2010. The analysis utilises the Leontief model, in both the “open” and “closed” variations with respect to households’ consumption, which allows to assess, at a disaggregated sectoral level, the direct and indirect production effects, as well as the induced consumption effects caused by exogenous changes in the final demand of each sector. The multipliers offer an up-to-date and systematic ranking of sectors according to their economy-wide potential impact owing to their technological features and inter-sectoral linkages.

Nikos Vettas, Konstantinos Peppas, Sophia Stavraki and Michail Vasileiadis: “The contribution of Industry to the Greek economy: facts and prospects”

The scope of the study is to examine the impact of various factors on the growth of Greek industrial firms, in order to identify those that can contribute to a gradual recovery of Industry in the coming years. In this context, the authors estimate a firm growth model with the Quantile Regression econometric method, using an unbalanced panel dataset of 18,143 companies that were active in Greek Industry over the period 2005-2018. The explanatory variables used are firm-, sector- and macroeconomic environment-specific. Further, they estimate the effects on firm growth from the structural reforms related to the business environment and from the sector’s participation in global value chains within or beyond the EU.

The estimations highlight the positive effect on firm growth from exports and the reduction in the time and cost required to export, the availability of funding from the banking sector and the stock market, as well as from the reduction in the cost and procedures to start a business. Positive effects also stem from the participation of the faster-growing Greek industrial companies in value chains mainly outside the EU. By contrast, high corporate debt to banks, adverse macroeconomic conditions, energy costs and the participation of businesses other than the faster-growing ones in value chains in EU countries have a negative impact on firm growth. The latter effect is possibly due to the strong competition that these businesses face in the European markets. Some differences appear when estimates are made for the subsamples of high and low performance industrial sectors in terms of economic activity, financial efficiency, innovativeness and extroversion.

The study includes policy recommendations, based on the results of the estimations, to support growth in Industry. These concern the reduction of energy costs, the change in the depreciation method for investments in machinery and equipment, as well as the financing of the sector.


Theodora Kosma, Pavlos Petroulas and Evangelia Vourvachaki: “What drives wage differentials in Greece: workplaces or workers?”

Using a micro-aggregated dataset that contains gross wages as well as employer and employee characteristics, the study investigates whether observed wage differentials in Greece reflect mostly the underlying variation in employer characteristics, i.e. the structure of the Greek production, or worker and job characteristics. The results show that both employer and worker characteristics are important contributors to the observed wage dispersion of full-time private sector jobs in Greece. Occupation and workplace effects alone explain around 52% of the overall wage variation in Greece. An additional 11% is explained by the impact of workplace-occupation matching. Other observable characteristics of the workers, such as age, gender and type of job contract, add up to 23.5% more explanatory power. Finally, the results also show that both the observed gender and contract type wage gaps are more prevalent among high-skilled occupations, acting thus as a disincentive to the acquisition of skills.


Ioannis Asimakopoulos, Athanasios P. Fassas and Dimitris Malliaropulos: “Does earnings quality matter? Evidence from the Athens Exchange”

The relation between accounting earnings and firm valuation has long been a topic of interest to academics and stock market participants. The study analyses the relationship between earnings quality and firm value, using a sample of non-financial firms with shares listed on the Athens Exchange over the period 2004-2019. The empirical findings indicate that investors value earnings quality, and this is reflected in a better valuation for firms having earnings of higher quality. The results are robust to different methodologies and controls for firm-specific factors.

The evidence is of particular importance for Greek firms seeking to expand their sources of financing beyond the Greek banking system. Such a development requires constant monitoring and strengthening of the corporate governance framework, with the aim of improving the quality of information conveyed by the firms to investors. In this respect, the provisions of Law 4706/2020 regarding the Greek corporate governance framework and the operation of the Hellenic Capital Market Commission seem to be in the right direction.

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Issue 52 also includes the abstracts of Working Papers published by the Special Studies Section of the Bank’s Economic Analysis and Research Department between August and December 2020.

The full text of Issue 52 is available on the Bank of Greece website: Bank of Greece Economic Bulletin, Issue 52



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