Sector Switching: An Unexplored Dimension of Firm Dynamics in Developing Countries
AbstractMuch of the literature on industry evolution has found firm dynamics to be an important source of sector-level productivity growth. In this paper, we ask whether the delineation of entry and exit firms matters in assessing the impact of firm turnover. Using detailed firm level data from Vietnam, it emerges that efficiency differences between sector switchers and exit/entry firms exist. Distinguishing between switchers and firm entry/exit is crucial for understanding the contribution of firm turnover to overall productivity growth. Moreover, we uncover distinct and illuminating firm and sector-level determinants of firm exit and switching, which need to be carefully considered in the search for effective policy.
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Bibliographic InfoPaper provided by IIIS in its series The Institute for International Integration Studies Discussion Paper Series with number iiisdp230.
Date of creation: 13 Sep 2007
Date of revision:
Other versions of this item:
- Carol Newman & John Rand & Finn Tarp, 2007. "Sector Switching: An Unexplored Dimension of Firm Dynamics in Developing Countries," Discussion Papers 07-22, University of Copenhagen. Department of Economics.
- Carol Newman & John Rand & Finn Tarp, 2007. "Sector Switching: An Unexplored Dimension of Firm Dynamics in Developing Countries," Trinity Economics Papers tep1007, Trinity College Dublin, Department of Economics.
- D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
- L6 - Industrial Organization - - Industry Studies: Manufacturing
- O14 - Economic Development, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
This paper has been announced in the following NEP Reports:
- NEP-ALL-2007-09-24 (All new papers)
- NEP-DEV-2007-09-24 (Development)
- NEP-ENT-2007-09-24 (Entrepreneurship)
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- Johannes Sauer & Klaus Frohberg & Henrich Hockmann, 2006. "Stochastic efficiency measurement: The curse of theoretical consistency," Journal of Applied Economics, Universidad del CEMA, vol. 0, pages 139-166, May.
- François Coppens & Fabienne Verduyn, 2009. "Analysis of business demography using markov chains : an application to Belgian data," Working Paper Research 170, National Bank of Belgium.
- KAWAKAMI Atsushi & MIYAGAWA Tsutomu, 2010. "Product Switching and Firm Performance in Japan," Discussion papers 10043, Research Institute of Economy, Trade and Industry (RIETI).
- Atsushi Kawakami & Tsutomu Miyagawa, 2013. "Product Switching and Firm Performance in Japan - Empirical Analysis Based on the Census of Manufacturers," Public Policy Review, Policy Research Institute, Ministry of Finance Japan, vol. 9(2), pages 287-314, March.
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