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Entry and Productivity Growth: Evidence from Microlevel Panel Data

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  • Philippe Aghion

    (Harvard University and IFS,)

  • Richard Blundell

    (University College London and IFS,)

  • Rachel Griffith

    (University College London and IFS,)

  • Peter Howitt

    (Brown University,)

  • Susanne Prantl

    (University College London and IFS,)

Abstract

How does entry affect productivity growth of incumbents? In this paper we exploit policy reforms in the United Kingdom that changed entry conditions by opening up the U.K. economy during the 1980s and panel data on British establishments to shed light on this question. We show that more entry, measured by a higher share of industry employment in foreign firms, has led to faster total factor productivity growth of domestic incumbent firms and thus to faster aggregate productivity growth. (JEL: L5, L10, O31, O4) Copyright (c) 2004 The European Economic Association.

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Bibliographic Info

Article provided by MIT Press in its journal Journal of the European Economic Association.

Volume (Year): 2 (2004)
Issue (Month): 2-3 (04/05)
Pages: 265-276

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Handle: RePEc:tpr:jeurec:v:2:y:2004:i:2-3:p:265-276

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  1. Richard Disney & Jonathan Haskel & Ylva Heden, 2003. "Restructuring and productivity growth in uk manufacturing," Economic Journal, Royal Economic Society, vol. 113(489), pages 666-694, 07.
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