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Firm Lifecycles and External Restructuring

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  • Hyytinen, Ari
  • Maliranta, Mika

Abstract

This paper studies how firms contribute to the productivity growth of an industry over their lifecycle. We present a decomposition method that allows us to condition the components of productivity growth on the age of production units. We find evidence for a prolonged positive exit effect that mirrors market selection during the early stages of firms’ lifecycle. This effect is tightly related to the negative initial productivity effect of entry. We also find some evidence that productivity-enhancing reallocation of resources between firms is concentrated on the middle aged firms.

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Bibliographic Info

Paper provided by The Research Institute of the Finnish Economy in its series Discussion Papers with number 1253.

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Length: 42 pages
Date of creation: 2011
Date of revision:
Handle: RePEc:rif:dpaper:1253

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Keywords: productivity; decomposition; lifecycle; entry; exit;

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References

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Cited by:
  1. Sauramo, Pekka & Maliranta, Mika, 2011. "Structural change in Finnish manufacturing: The theory of the aggregation of production functions and an empirical analysis with a plant-level panel," Structural Change and Economic Dynamics, Elsevier, vol. 22(2), pages 116-134, June.

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