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Convergence of Corporate Productivity, Globalization, Information Technologies, and Competition

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  • Paul-Antoine Chevalier

    (Banque de France, London School of Economics)

  • Rémy Lecat

    (Banque de France, London School of Economics)

  • Nicholas Oulton

    (Banque de France, London School of Economics)

Abstract

Studies on business data has revealed wide differences in productivity between firms, sometimes even within narrowly defined activity sectors. The least productive firms therefore have ample margin for catching up. Their convergence towards the level of the most productive firms can be an important factor in productivity dynamics at macroeconomic level. Our article sheds light on this convergence in France in the 1990s and 2000s. Convergence was greater for labour productivity than for total factor productivity. But the speed of convergence slowed in the 1990s, mainly because of an acceleration in the productivity of firms on the technological frontier, i.e., the firms that were already the most productive. We suggest three explanations for these stylized facts: globalization ; information technologies, which seemingly benefited the most productive firms ; increased competition, which stimulated the productivity of firms on the technological frontier while inhibiting convergence for the least productive firms.

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File URL: http://www.insee.fr/fr/ffc/docs_ffc/ES419-420f.pdf
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Bibliographic Info

Article provided by Institut National de la Statistique et des Etudes Economiques in its journal Economie et Statistique.

Volume (Year): 419-420 (2009)
Issue (Month): (August)
Pages: 101-124

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Handle: RePEc:crs:ecosta:es419-420f

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Related research

Keywords: Convergence ; Productivity ; TFP ; Globalisation ; ICT ; Competition;

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References

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  1. Rachel Griffith & Helen Simpson & Stephen Redding, 2002. "Productivity convergence and foreign ownership at the establishment level," IFS Working Papers W02/22, Institute for Fiscal Studies.
  2. Robert J. Barro, 1989. "Economic Growth in a Cross Section of Countries," NBER Working Papers 3120, National Bureau of Economic Research, Inc.
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  13. Alla Lileeva & Daniel Trefler, 2010. "Improved Access to Foreign Markets Raises Plant-Level Productivity... for Some Plants," The Quarterly Journal of Economics, MIT Press, vol. 125(3), pages 1051-1099, August.
  14. Bernard, Andrew B. & Bradford Jensen, J., 1999. "Exceptional exporter performance: cause, effect, or both?," Journal of International Economics, Elsevier, vol. 47(1), pages 1-25, February.
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