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Revisiting productivity growth accounting decompositions

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  • Massari, Filippo

Abstract

This paper proposes a modification to popular productivity growth accounting decompositions useful for calibrating endogenous growth models. Specifically, the within-firm component is further decomposed to show the covariance of firms’ productivity growth rates and relative levels. This moment provides information about the systematic churning within the relative productivity distribution that, in endogenous growth models, stems from firms’ investment behavior, thus affecting aggregate income growth. This decomposition allows assessing modeling assumptions and quantifying parameters that introduce or affect differential incentives to grow across firms.

Suggested Citation

  • Massari, Filippo, 2025. "Revisiting productivity growth accounting decompositions," Research in Economics, Elsevier, vol. 79(3).
    • Handle: RePEc:eee:reecon:v:79:y:2025:i:3:s1090944325000328
    DOI: 10.1016/j.rie.2025.101055
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    Keywords

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    JEL classification:

    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • 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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