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Productivity growth, firm turnover and new varieties

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  • Thomas von Brasch
  • Arvid Raknerud
  • Diana-Cristina Iancu

Abstract

In this paper, we reconcile two different strands of the literature: the literature on how new goods impact prices and the literature on productivity growth and firm turnover. The decomposition we propose generalises the framework currently used in the literature. Moreover, we extend the estimator for the demand elasticity, proposed by Feenstra (1994) and supplemented by Soderbery (2015). To illustrate the decomposition and estimator, we analyse the case of firm turnover in Norway. Our results indicate that net creation of new varieties from firm turnover contributes by about one half percentage point to annual aggregate productivity growth.

Suggested Citation

  • Thomas von Brasch & Arvid Raknerud & Diana-Cristina Iancu, 2018. "Productivity growth, firm turnover and new varieties," Economic Statistics Centre of Excellence (ESCoE) Discussion Papers ESCoE DP-2018-11, Economic Statistics Centre of Excellence (ESCoE).
    • Handle: RePEc:nsr:escoed:escoe-dp-2018-11
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    Cited by:

    1. Thomas von Brasch & Arvid Raknerud, 2021. "A two-stage pooled panel data estimator of demand elasticities," Discussion Papers 951, Statistics Norway, Research Department.

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    More about this item

    Keywords

    Aggregation; Productivity growth; New varieties; Demand elasticity; Panel data; Two-stage estimator;
    All these keywords.

    JEL classification:

    • C43 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Index Numbers and Aggregation
    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence

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