Aggregate Productivity Growth: Lessons from Microeconomic Evidence
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
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References
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Productivity and Firm Turnover in Israeli Industry: 1979-1988
Zvi Griliches,Haim Regev +1 more
TL;DR: An analysis of a large panel data set on Israeli industrial firms finds that most of the growth in aggregate productivity comes from productivity changes within firms rather than from entry, exit, or differential growth as mentioned in this paper.
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Fifty Years of Economic Measurement
Ernst R. Berndt,Jack E. Triplett +1 more
TL;DR: The most recent edition of the CRIW Conference on Research in Income and Wealth (CRIW 1988) as discussed by the authors contains papers presented at a conference in May 1988 in Washington, D.C. The call for papers emphasized assessments of broad topics in economic measurement, both conceptual and pragmatic.
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Waves of Creative Destruction : Firm-Specific Learning-by-Doing and the Dynamics of Innovation
TL;DR: In this paper, the authors developed a model of repeated innovation with knowledge spillovers, where firms compete on two dimensions: product quality and distribution costs, and where learning-by-doing on the part of incumbent firms gives them a competitive advantage over would-be entrants.
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Computational Appendix to Entry, Exit, Embodied Technology, and Business Cycles
TL;DR: This appendix provides a detailed exposition of the computational method applied to the model of Campbell (1997) that uses quadrature approximation of integrals to approximate a system of functional equations with a standard system of vector equations.
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Output price and markup dispersion in micro data: The roles of producer heterogeneity and noise
Mark J. Roberts,Dylan Supina +1 more
TL;DR: In this article, the authors provide empirical evidence on the extent of producer heterogeneity in the output market by analyzing output price and price-marginal cost markups at the plant level for thirteen homogeneous manufactured goods.