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Nature Versus Nurture in the Origins of Highly Productive Businesses: An Exploratory Analysis of U.S. Manufacturing Establishments

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  • J. David Brown
  • John Earle

Abstract

This paper investigates the origins of productivity leaders, those that operate close to and help push out the production frontier. Do such businesses emerge as top performers from the very beginning of their lives, for example as the consequence of an outstanding founding idea, technology, or location? Or, at the other extreme, do they appear initially as completely average (or even underperformers) that exhibit gradual improvement as they learn and develop with age? To answer this question we draw upon five decades of U.S. Census of Manufacturing (CM) establishment-level data, tracing the productivity leaders of the most recent CM (2007) back over their observed life spans. We also examine possible industry-level correlates of variation in the extent of nature versus nurture that are suggested by theories of industry dynamics and economic growth.

Suggested Citation

  • J. David Brown & John Earle, 2011. "Nature Versus Nurture in the Origins of Highly Productive Businesses: An Exploratory Analysis of U.S. Manufacturing Establishments," Working Papers 11-26, Center for Economic Studies, U.S. Census Bureau.
  • Handle: RePEc:cen:wpaper:11-26
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    File URL: https://www2.census.gov/ces/wp/2011/CES-WP-11-26.pdf
    File Function: First version, 2011
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    References listed on IDEAS

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    3. Chad Syverson, 2011. "What Determines Productivity?," Journal of Economic Literature, American Economic Association, vol. 49(2), pages 326-365, June.
    4. Zoltán J. Ács & Pamela Mueller, 2015. "Employment effects of business dynamics: Mice, Gazelles and Elephants," Chapters,in: Global Entrepreneurship, Institutions and Incentives, chapter 16, pages 304-319 Edward Elgar Publishing.
    5. Bartelsman, Eric J & Haskel, Jonathan & Martin, Ralf, 2008. "Distance to Which Frontier? Evidence on Productivity Convergence from International Firm-level Data," CEPR Discussion Papers 7032, C.E.P.R. Discussion Papers.
    6. Richard Ericson & Ariel Pakes, 1995. "Markov-Perfect Industry Dynamics: A Framework for Empirical Work," Review of Economic Studies, Oxford University Press, vol. 62(1), pages 53-82.
    7. Lucia Foster & John C. Haltiwanger & C. J. Krizan, 2001. "Aggregate Productivity Growth: Lessons from Microeconomic Evidence," NBER Chapters,in: New Developments in Productivity Analysis, pages 303-372 National Bureau of Economic Research, Inc.
    8. Jovanovic, Boyan, 1982. "Selection and the Evolution of Industry," Econometrica, Econometric Society, vol. 50(3), pages 649-670, May.
    9. Ron S Jarmin & Javier Miranda, 2002. "The Longitudinal Business Database," Working Papers 02-17, Center for Economic Studies, U.S. Census Bureau.
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