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Producer Turnover and Productivity Growth in Developing Countries

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  • Roberts, Mark J
  • Tybout, James R

Abstract

The reallocation of resources, either across sectors or across producers within a sector, can serve as a potential source of productivity growth. New research findings exploit comprehensive microeconomic data on the manufacturing sectors of Chile, Colombia, and Morocco to document resource shifts as producers enter, expand, contract, and exit operation. The micro-level adjustment is substantial; between 25 and 30 percent of the total number of manufacturing jobs turn over each year. In the short run, the productivity effects of this turnover are modest because the new plants that come on line are only slightly more productive than the ones they replace‹and both are typically small. In the longer term, however, the turnover generates more substantial increases in productivity because the new firms that survive record substantial productivity gains in their early years. Moreover, firms that exit are typically on a downward productivity spiral and would probably have dragged down sectoral efficiency farther if they had continued in operation.

Suggested Citation

  • Roberts, Mark J & Tybout, James R, 1997. "Producer Turnover and Productivity Growth in Developing Countries," World Bank Research Observer, World Bank Group, vol. 12(1), pages 1-18, February.
  • Handle: RePEc:oup:wbrobs:v:12:y:1997:i:1:p:1-18
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    Cited by:

    1. Hagemejer, Jan, 2007. "Factors driving the firms decision to export. Firm-level evidence from Poland," MPRA Paper 17717, University Library of Munich, Germany.
    2. Goyette, Jonathan & Gallipoli, Giovanni, 2015. "Distortions, efficiency and the size distribution of firms," Journal of Macroeconomics, Elsevier, vol. 45(C), pages 202-221.
    3. C.J. Krizan & John Haltiwanger & Lucia Foster, 2002. "The Link Between Aggregate and Micro Productivity Growth: Evidence from Retail Trade," Working Papers 02-18, Center for Economic Studies, U.S. Census Bureau.
    4. Eric J. Bartelsman & John Haltiwanger & Stefano Scarpetta, 2004. "Microeconomic Evidence of Creative Destruction in Industrial and Developing Countries," Tinbergen Institute Discussion Papers 04-114/3, Tinbergen Institute.
    5. José Miguel Benavente & Alexander Galetovic & Ricardo Sanhueza, 2005. "La dinámica industrial y el financiamiento de las pyme," Documentos de Trabajo 201, Centro de Economía Aplicada, Universidad de Chile.
    6. Ligia Alba Melo & Carlos Andrés Ballesteros, 2013. "Creación, destrucción y reasignación del empleo en el sector manufacturero colombiano," Revista de Economía Institucional, Universidad Externado de Colombia - Facultad de Economía, vol. 15(28), pages 281-311, January-J.
    7. Brandts, Jordi & Giritligil, Ayça Ebru, 2008. "Entry and market selection of firms: A laboratory study," Journal of Economic Behavior & Organization, Elsevier, vol. 68(3-4), pages 593-612, December.
    8. Hoekman & Bernard & Winters, L. Alan, 2005. "Trade and employment : stylized facts and research findings," Policy Research Working Paper Series 3676, The World Bank.
    9. Jonathan Goyette, 2012. "Optimal tax threshold: the consequences on efficiency of official vs. effective enforcement," Cahiers de recherche 12-07, Departement d'Economique de l'École de gestion à l'Université de Sherbrooke.
    10. Kalonga Stambuli, 2002. "Political Change, Economic Transition and Catalysis of IMF and World Bank Models - the case of Malawi," Macroeconomics 0211003, EconWPA.
    11. Jaan Masso & Raul Eamets & Kaia Philips, 2004. "Firm Demographics And Productivity Dynamics In Estonia," University of Tartu - Faculty of Economics and Business Administration Working Paper Series 25, Faculty of Economics and Business Administration, University of Tartu (Estonia).
    12. Erol Taymaz & Ebru Voyvoda & Kamil Yilmaz, 2010. "Global Links and Local Bonds: The Role of Ownership and Size in Productivity Growth," Koç University-TUSIAD Economic Research Forum Working Papers 1020, Koc University-TUSIAD Economic Research Forum.
    13. Grabiella Berloffa & Maria Luigia Segnana, 2004. "Trade, inequality and pro-poor growth: Two perspectives, one message?," Department of Economics Working Papers 0408, Department of Economics, University of Trento, Italia.

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