The quality of the public administration is an important driver of EU competitiveness and influences firms' growth prospects through a number of channels. During their lifetime, firms interact with public administration in different ways; complying with regulatory requirements, registering, paying taxes, applying for licenses, etc.. In this regard, a higher quality in public administration may warrant lower compliance costs and lower uncertainty for companies, which are important elements to boost investments and firm growth. Therefore, the purpose of this study is to model and to analyse empirically the contribution of the quality of public administration to firm productivity and firm growth. The study will provide empirical findings, and discuss policy implications in the light of EU flagship initiatives such as the EU 2020 strategy.