Firm Entry, Productivity Differentials and Turnovers in Import Substituting Markets: A study of the petrochemical industry in Colombia
AbstractThis paper analyses plant entry, total factor productivity growth, average productivity level differentials and turnovers across Colombia's petrochemical industry for the 1974-1998 period. Results show that successful entrants shaped industry productivity and induced plant restructuring among incumbent plants. There is consistent plant heterogeneity across plant cohorts as well as across sub-markets within petrochemicals. Entry flows were steady increasing within plastics regardless of trade policy regimes. Survival rates are remarkably high and consistent over time in medium-size plants meaning that entrants adopted competitive post-entry strategies. Total factor productivity growth decomposition shows that the incumbent effect dominates the turnover effect. Market share reallocation among continuing plants constitutes an important source of productivity growth. Econometric results suggest that barriers to entry associated with plant technology licensing and dependence of imported raw materials deter entry while complementary market variables such as industry productivity levels, growth in housing construction, and fringe competition induce firm entry.
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Bibliographic InfoPaper provided by Econometric Society in its series Econometric Society 2004 Latin American Meetings with number 22.
Date of creation: 11 Aug 2004
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Entry; Turnover; Total Factor Productivity; Petrochemical Industry;
Other versions of this item:
- Luis Gutierrez & Carlos Pombo, 2004. "Firm entry, productivity differentials and turnovers in import substituting markets: a study of the petrochemical industry in Colombia," BORRADORES DE INVESTIGACIÃN 002728, UNIVERSIDAD DEL ROSARIO.
- O12 - Economic Development, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
- D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
- O47 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Measurement of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
This paper has been announced in the following NEP Reports:
- NEP-ALL-2004-10-30 (All new papers)
- NEP-COM-2004-10-30 (Industrial Competition)
- NEP-ENT-2004-10-30 (Entrepreneurship)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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