Aggregate Productivity Growth: Lessons from Microeconomic Evidence
Reads0
Chats0
TLDR
The authors examined the relationship between microeconomic productivity dynamics and aggregate productivity growth using establishment-level data for U.S. manufacturing establishments as well for selected service industries and found that the contribution of reallocation of outputs and inputs from less productive to more productive establishments plays a significant role in accounting for aggregate productivity.Abstract:
In this paper, we exploit establishment-level data to examine the relationship between microeconomic productivity dynamics and aggregate productivity growth. After synthesizing the evidence from recent studies, we conduct our own analysis using establishment-level data for U.S. manufacturing establishments as well for selected service industries. The use of longitudinal micro data on service sector establishments is one of the novel features of our analysis. Our main findings are summarized as follows: (i) the contribution of reallocation of outputs and inputs from less productive to more productive establishments plays a significant role in accounting for aggregate productivity growth; (ii) for the selected service industries considered, the contribution of net entry (more productive entering establishments displacing less productive exiting establishments) is dominant; (iii) the contribution of net entry to aggregate productivity growth is disproportionate and is increasing in the horizon over which the changes are measured since longer horizon yields greater differentials from selection and learning effects; (iv) the contribution of reallocation to aggregate productivity growth varies over time (e.g. is cyclically sensitive) and industries and is somewhat sensitive to subtle differences in measurement and decomposition methodologies.read more
Citations
More filters
Journal ArticleDOI
Globalisation, multinationals and productivity in Japan's lost decade
TL;DR: Kneller et al. as discussed by the authors studied the process of plant exit and productivity growth in Japan during the 'lost decade' and found that the low rate of productivity growth at the aggregate level was due to slow within plant productivity growth and a small contribution from the entry and exit components.
BookDOI
Coping with crises : why and how to protect employment and earnings
TL;DR: The authors examines the challenges inherent in crafting policy responses, with particular attention to developing countries, focusing on the potential tradeoffs between offsetting adverse short-term impacts and preserving incentives for economic recovery and future growth, and between protecting the most vulnerable and compensating those most immediately impacted.
Journal ArticleDOI
Zombies: Who are they and how do firms become zombies?
Ivana Blažková,Ondřej Dvouletý +1 more
TL;DR: In this article, the authors contribute to the knowledge on so-called zombie firms, i.e., inefficient and uncompetitive companies operating in the economy are a significant impediment to sustainable economic growth.
MonographDOI
Growth and Productivity in East Asia
Takatoshi Ito,Andrew K. Rose +1 more
TL;DR: In this paper, a new database comprising eighty-four Japanese sectors reveals findings for the last thirty years of sectoral productivity and growth in Japan and focuses on productivity and its relationship to research and development, foreign ownership, and policy reform in such industries as manufacturing, automobile production, and information technology.
References
More filters
Book
Capitalism, Socialism and Democracy
TL;DR: In this paper, the authors present a history of the first half of the 20th century, from 1875 to 1914, of the First World War and the Second World War.
Journal ArticleDOI
An Evolutionary Theory of Economic Change.by Richard R. Nelson; Sidney G. Winter
ReportDOI
A Model of Growth Through Creative Destruction
Philippe Aghion,Peter Howitt +1 more
TL;DR: In this paper, a model of endogenous growth is developed in which vertical innovations, generated by a competitive research sector, constitute the underlying source of growth and equilibrium is determined by a forward-looking difference equation, according to which the amount of research in any period depends upon the expected amount of the research next period.
Posted Content
The Dynamics Of Productivity In The Telecommunications Equipment Industry
George S Olley,Ariel Pakes +1 more
TL;DR: In this article, the authors developed an estimation algorithm that takes into account the relationship between productivity on the one hand, and both input demand and survival on the other, guided by a dynamic equilibrium model that generates the exit and input demand equations needed to correct for the simultaneity and selection problems.
ReportDOI
The Dynamics of Productivity in the Telecommunications Equipment Industry
G. Steven Olley,Ariel Pakes +1 more
TL;DR: In this paper, an empirical focus is on estimating the parameters of a production function for the equipment industry, and then using those estimates to analyze the evolution of plant-level productivity.