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Productivity Dispersion, Entry, and Growth in U.S. Manufacturing Industries

Author

Listed:
  • Cindy Cunningham
  • Lucia Foster
  • Cheryl Grim
  • John Haltiwanger
  • Sabrina Wulff Pabilonia
  • Jay Stewart
  • Zoltan Wolf

Abstract

Within-industry productivity dispersion is pervasive and exhibits substantial variation across countries, industries, and time. We build on prior research that explores the hypothesis that periods of innovation are initially associated with a surge in business start-ups, followed by increased experimentation that leads to rising dispersion potentially with declining aggregate productivity growth, and then a shakeout process that results in higher productivity growth and declining productivity dispersion. Using novel detailed industry-level data on total factor productivity and labor productivity dispersion from the Dispersion Statistics on Productivity along with novel measures of entry rates from the Business Dynamics Statistics and productivity growth data from the Bureau of Labor Statistics for U.S. manufacturing industries, we find support for this hypothesis, especially for the high-tech industries.

Suggested Citation

  • Cindy Cunningham & Lucia Foster & Cheryl Grim & John Haltiwanger & Sabrina Wulff Pabilonia & Jay Stewart & Zoltan Wolf, 2021. "Productivity Dispersion, Entry, and Growth in U.S. Manufacturing Industries," Working Papers 21-21, Center for Economic Studies, U.S. Census Bureau.
    • Handle: RePEc:cen:wpaper:21-21
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    File URL: https://www2.census.gov/ces/wp/2021/CES-WP-21-21.pdf
    File Function: First version, 2021
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    Cited by:

    1. Andrea Colciago & Vivien Lewis & Branka Matyska, 2023. "Corporate taxes, productivity, and business dynamism," Working Papers 780, DNB.
    2. Santiago Caicedo & Jeremy Pearce, 2024. "Need for Speed: Quality of Innovations and the Allocation of Inventors," Staff Reports 1127, Federal Reserve Bank of New York.

    More about this item

    Keywords

    dispersion; entry; innovation; productivity; manufacturing; high-tech industries;
    All these keywords.

    JEL classification:

    • O3 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights
    • O4 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity

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