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Impeded Industrial Restructuring: The Growth Penalty

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  • David B. Audretsch
  • Martin A. Carree
  • Adriaan J. Van Stel
  • A. Roy Thurik

Abstract

This paper documents that a process of industrial restructuring has been transforming the developed economies, where large corporations are accounting for less economic activity and small firms are accounting for a greater share of economic activity. Not all countries, however, are experiencing the same shift in their industrial structures. Little is known about the cost of resisting this restructuring process. The goal of this paper is to identify whether there is a cost, measured in terms of forgone growth, of an impeded restructuring process. The cost is measured by linking growth rates of European countries to deviations from the ‘optimal’ industrial structure. The empirical evidence suggests that countries impeding the restructuring process pay a penalty in terms of forgone growth.

Suggested Citation

  • David B. Audretsch & Martin A. Carree & Adriaan J. Van Stel & A. Roy Thurik, 2002. "Impeded Industrial Restructuring: The Growth Penalty," Kyklos, Wiley Blackwell, vol. 55(1), pages 81-98.
  • Handle: RePEc:bla:kyklos:v:55:y:2002:i:1:p:81-98
    DOI: 10.1111/1467-6435.00178
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    More about this item

    JEL classification:

    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development

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