The impacts of technological change, industry structure and Plant entry/exit on industry efficiency growth
In this paper, we provide a theoretical framework combining both the theory of adoption and industry evolution to explore the different sources of industry efficiency growth. The objective is to investigate which of the explanatory variables can explain inefficiency. The theoretical and simulation results of this study show that the inter-firms efficiency variance exerts a substantial impact on industry efficiency. Productivity change within individual plant (via adoption and learning) is a major source of efficiency growth in the industry. Exit usually improves aggregate efficiency as less efficient plants leave industries. The impact of entry is less clear since it depends on the efficiency levels of entrants. Finally, the role of competition in generating economic efficiency is strongly confirmed. Our theoretical findings confirm and extend others in the empirical studies.
|Date of creation:||Dec 2006|
|Date of revision:|
|Publication status:||Published in The Business Review, Cambridge Number 2.Vol. 6(2006): pp. 1-12|
|Contact details of provider:|| Postal: Ludwigstraße 33, D-80539 Munich, Germany|
Web page: https://mpra.ub.uni-muenchen.de
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Martin Neil Baily & Eric J. Bartelsman & John Haltiwanger, 1996.
"Labor Productivity: Structural Change and Cyclical Dynamics,"
NBER Working Papers
5503, National Bureau of Economic Research, Inc.
- Martin Neil Baily & Eric J. Bartelsman & John Haltiwanger, 2001. "Labor Productivity: Structural Change And Cyclical Dynamics," The Review of Economics and Statistics, MIT Press, vol. 83(3), pages 420-433, August.
- Martin Neil Baily & Eric J. Bartelsman & John Haltiwanger, 1998. "Labor Productivity: Structural Change and Cyclical Dynamics," Working Papers 98-7, Center for Economic Studies, U.S. Census Bureau.
- Martin N. Baily & Eric J. Bartelsman & John Haltiwanger, 1996. "Labor productivity: structural change and cyclical dynamics," Finance and Economics Discussion Series 96-10, Board of Governors of the Federal Reserve System (U.S.).
- Baily, Martin Neil & Bartelsman, Eric J. & Haltiwanger, John, 1995. "Labor productivity: structural change and cyclical dynamics," Serie Research Memoranda 0050, VU University Amsterdam, Faculty of Economics, Business Administration and Econometrics.
- Jensen, Richard, 1992. "Innovation Adoption and Welfare under Uncertainty," Journal of Industrial Economics, Wiley Blackwell, vol. 40(2), pages 173-80, June.
- Lucia Foster & John Haltiwanger & C.J. Krizan, 1998.
"Aggregate Productivity Growth: Lessons from Microeconomic Evidence,"
NBER Working Papers
6803, National Bureau of Economic Research, Inc.
- 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.
- John Haltiwanger & C J Krizan & Lucia Foster, 1998. "Aggregate Productivity Growth: Lessons From Microeconomic Evidence," Working Papers 98-12, Center for Economic Studies, U.S. Census Bureau.
- Hopenhayn, Hugo A, 1992. "Entry, Exit, and Firm Dynamics in Long Run Equilibrium," Econometrica, Econometric Society, vol. 60(5), pages 1127-50, September.
- Bee Yan Aw & Xiaomin Chen & Mark J. Roberts, 1997. "Firm-level Evidence on Productivity Differentials, Turnover, and Exports in Taiwanese Manufacturing," NBER Working Papers 6235, National Bureau of Economic Research, Inc.
When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:9546. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Joachim Winter)
If references are entirely missing, you can add them using this form.