Productivity, market selection and corporate growth: comparative evidence across US and Europe
This paper analyzes the patterns of market selection in manufacturing industries of France, Germany, UK, and USA. We first disentangle the contribution to industry-level productivity growth of within-firm productivity changes and betweenfirms reallocation of shares. The evidence corroborates the notion that within-firm learning prevails over market selection forces. Second, we address the "strength" of selection by exploring to what extent firm growth rates are shaped by relative productivity levels as compared to variation thereof. Our key finding is an overall weak relationship between productivity and growth, and therefore a weak power of selection forces in all countries and sectors. A further interesting result is that variations in relative efficiency appear to have a greater impact then relative efficiency levels themselves.
|Date of creation:||08 Jul 2013|
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