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Firm dynamics and productivity growth

Author

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  • Haltiwanger, John

    () (University of Maryland)

Abstract

Countries differ substantially in the extent to which more productive firms are large and/or are becoming larger and less productive firms are small and/or becoming smaller. A challenge for both emerging and advanced economies is that achieving such static and dynamic allocative efficiency requires an ongoing process of restructuring and reallocation. Such restructuring and reallocation is by its very nature costly. Market structure and institutions that promote well-functioning business dynamism are, accordingly, critical for economic performance. In the 1980s abd 1990s, the US exhibited a robust pace of business dynamism that contributed substantially to US productivity and job growth. There are, however, some disturbing trends in the nature of US business dynamism - for example, the pace of business start-ups has declined secularly especially over the last decade. The decline in the pace of business dynamism may be contributing to the anaemic US recovery from the recent recession.

Suggested Citation

  • Haltiwanger, John, 2011. "Firm dynamics and productivity growth," EIB Papers 5/2011, European Investment Bank, Economics Department.
  • Handle: RePEc:ris:eibpap:2011_005
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Alessandro Gavazza & Simon Mongey & Giovanni L. Violante, 2016. "Aggregate Recruiting Intensity," CEP Discussion Papers dp1449, Centre for Economic Performance, LSE.
    2. CompNet Task Force, 2014. "Micro-based evidence of EU competitiveness: The CompNet database," Working Paper Research 253, National Bank of Belgium.
    3. Giorgio Calcagnini & Annalisa Ferrando & Germana Giombini, 2015. "Multiple market imperfections, firm profitability and investment," European Journal of Law and Economics, Springer, vol. 40(1), pages 95-120, August.
    4. Klaus Friesenbichler, 2013. "Firm Growth in Conflict Countries: Some Evidence from South Asia," Review of Economics & Finance, Better Advances Press, Canada, vol. 3, pages 33-44, May.
    5. Sai Ding & Puyang Sun & Wei Jiang, 2016. "The Effect of Import Competition on Firm Productivity and Innovation: Does the Distance to Technology Frontier Matter?," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 78(2), pages 197-227, April.
    6. Casey Ichniowski & Kathryn L. Shaw, 2009. "Insider Econometrics: Empirical Studies of How Management Matters," NBER Working Papers 15618, National Bureau of Economic Research, Inc.
    7. Dhyne, Emmanuel & di Mauro, Filippo & Berthou, Antoine & Galuščák, Kamil & Altomonte, Carlo & Opromolla, Luca David & Amador, João & Soares, Ana Cristina & Lopez-Garcia, Paloma & Benatti, Nicola & Ang, 2014. "Micro-based evidence of EU competitiveness: the CompNet database," Working Paper Series 1634, European Central Bank.
    8. Alexandru Cojocaru, 2017. "Kosovo Jobs Diagnostic," World Bank Other Operational Studies 27173, The World Bank.

    More about this item

    Keywords

    Productivity; Job Creation; Business Start-Ups;

    JEL classification:

    • J63 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Turnover; Vacancies; Layoffs
    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
    • 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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