between when reform is implemented and when measured by the OECD in a particular year. However, Figure 3 shows that for instance in the case of France the transport services sector for which information is available on a yearly basis the reform process is rather uneven. Therefore, we prefer the constant interpolation strategy.

# **2.2 Firm‐Level Performance**

The firm‐level data for estimating our TFP measures were retrieved from the Amadeus / Orbis database from Bureau van Dijk (BvD). In fact, the Amadeus database is a sub‐set of the world‐wide Orbis database which only contains European firms. This corresponds nicely to our interest in EU countries and so we exclude non‐EU European firms from our analysis. Although our aim is to include as many European countries as possible, unfortunately Amadeus does not report all variables needed in order to calculate TFP for each country (see below). Moreover, some microstates such as Luxembourg, Malta and Cyprus show few firm observations for which we also check the robustness of our results. Data in Amadeus are given for the period 1995‐2014, but with substantially improved firm‐level observations as of 2005, and even better after 2007. As said before, both manufacturing and services firms are considered in our TFP computations so as to take stock of the wider downstream economy as most European countries nowadays are relatively more dependent on services in terms of value‐added than manufacturing. See Table A3 in the annex for a yearly overview of firm observations for services and goods.

One note of caution is warranted for our firm coverage. Although preferably one would like to have an entirely balanced panel data set with only surviving firms, in our case that seems rather difficult. Although a balanced set can be found for the years 2008‐2013, our preferred time frame is 2006‐2013 which covers a less than perfect panel format of surviving firms. The main reason for preferring the latter time period is that with purely surviving firms as of 2008 only, our observations drop by 60 percent. Partly this is due to the shorter time period; yet in large part this is due to the so few firms that are consistently present in Amadeus. Moreover, Figure 1 shows that there is some interesting policy variation across EU countries to be exploited as some countries have lowered their regulations more significantly than others which as of 2008 is less the case. Nonetheless, to somehow compensate for this trade‐off our chosen sample from 2006 onwards contains only firms that report at least four years of data. Furthermore, robustness checks for post‐2008 are also provided in this paper and in large part confirm our main results.

Firm‐level TFP measures used in this paper are computed in different ways. Over the years, various methodologies have been developed in the international economic literature which have been taken up in recent empirical works with Olley and Pakes (2003) and Levinsohn and Petrin (2008) as most commonly used ones. Several papers that are very close to our line of research such as Fernandes and Paunov (2012) and Arnold _et al_ . (2015) have used the TFP estimation developed by Ackerberg _et al_ . (2006; 2015). Although all three approaches correct for the endogeneity of input choices, including the choice of services as inputs, for the TFP estimates, the Ackerberg specification improves the former two TFP methods by correcting for potential collinearity problems, which could otherwise occur from a distorting factor with regards to the identification of the variable input coefficients. Ackerberg _et al_ . (2006; 2015) also provide correction for the timing of the input choice decision.

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