scholarly journals Do Crises Catalyze Creative Destruction? Firm-Level Evidence from Indonesia

2011 ◽  
Author(s):  
Mary Hallward-Driemeier ◽  
Bob Rijkers
Keyword(s):  
Creative Destruction ◽  
Firm Level

scholarly journals Creative Destruction of Industries: Yokohama City in the Great Kanto Earthquake, 1923

2019 ◽  
Vol 79 (1) ◽  
pp. 1-31 ◽  
Author(s):  
Tetsuji Okazaki ◽  
Toshihiro Okubo ◽  
Eric Strobl
Keyword(s):  
Creative Destruction ◽  
Manufacturing Industries ◽  
Firm Level ◽  
Machine Technology ◽  
Kanto Earthquake ◽  
Level Data ◽  
Firm Level Data ◽  
Before And After

The Great Kanto Earthquake occurred on 1 September 1923 and inflicted serious damage on Yokohama City. About 90 percent of the factories in Yokohama City were burnt down or completely destroyed. However, these manufacturing industries appear to have swiftly recovered in the aftermath of the damage. This article investigates the role of creative destruction due to the Great Kanto Earthquake. Using firm-level data on capital (horsepower of motors) before and after the earthquake, we find substantial creative destruction, that is, upgrade of machine technology and/or survival of efficient firms. We find further collaborating evidence of this at the prefecture level.

scholarly journals Creative Destruction and Uncertainty

2019 ◽  
Vol 18 (4) ◽  
pp. 1814-1843
Author(s):  
Petr Sedláček
Keyword(s):  
Firm Dynamics ◽  
Creative Destruction ◽  
Technology Shocks ◽  
Dynamics Model ◽  
Vector Autoregressions ◽  
Firm Level ◽  
Productivity Shocks ◽  
Technology Growth ◽  
Structural Vector ◽  
Dot Com

Abstract Uncertainty rises in recessions. But does uncertainty cause downturns or vice versa? This paper argues that counter-cyclical uncertainty fluctuations are a by-product of technology growth. In a firm dynamics model with endogenous technology adoption, faster technology growth widens the dispersion of firm-level productivity shocks, a benchmark uncertainty measure. Moreover, faster technology growth spurs a creative destruction process, generates a temporary downturn, and renders uncertainty counter-cyclical. Estimates from structural vector autoregressions (VARs) on U.S. data confirm the model’s predictions. On average, 1/4 of the cyclical variation in uncertainty is driven by technology shocks. This fraction rises to 2/3 around the “dot-com” bubble.

scholarly journals Innovation, creative destruction and structural change: firm-level evidence from European countries

2016 ◽  
Vol 24 (4) ◽  
pp. 346-381 ◽  
Author(s):  
Bernhard Dachs ◽  
Martin Hud ◽  
Christian Koehler ◽  
Bettina Peters
Keyword(s):  
Structural Change ◽  
Creative Destruction ◽  
European Countries ◽  
Firm Level

scholarly journals Do Crises Catalyze Creative Destruction? Firm-level Evidence from Indonesia

2013 ◽  
Vol 95 (5) ◽  
pp. 1788-1810 ◽  
Author(s):  
Mary Hallward-Driemeier ◽  
Bob Rijkers
Keyword(s):  
Creative Destruction ◽  
Firm Level

scholarly journals Creative destruction and productivity: entrepreneurship by type, sector and sequence

2012 ◽  
Vol 1 (2) ◽  
pp. 125-146 ◽  
Author(s):  
Martin Andersson ◽  
Pontus Braunerhjelm ◽  
Per Thulin
Keyword(s):  
Production Function ◽  
New Ventures ◽  
Creative Destruction ◽  
Negative Influence ◽  
Time Lags ◽  
Firm Level ◽  
Content Type ◽  
Specific Effects ◽  
Time Specific ◽  
Level Production

PurposeSchumpeter claimed the entrepreneur to be instrumental for creative destruction and industrial dynamics. Entrepreneurial entry serves to transform and revitalize industries, thereby enhancing their competitiveness. The purpose of this paper is to investigate if entry of new firms influences productivity amongst incumbent firms, and the extent to which altered productivity can be attributed sector and time specific effects.Design/methodology/approachImplementing a unique dataset the paper estimates a firm‐level production function in which the productivity of incumbent firms is modeled as a function of firm attributes and regional entrepreneurship activity.FindingsThe analysis finds support for positive productivity effects of entrepreneurship on incumbent firms, albeit the effect varies over time, what the authors refer to as a “delayed entry effect”. An immediate negative influence on productivity is followed by a positive effect several years after the initial entry. Moreover, the productivity of incumbent firms in services sectors appears to be more responsive to regional entrepreneurship, as compared to the productivity of manufacturing firms.Originality/valueThe paper employs a firm‐level production function approach allowing for time lags of the effect of entrepreneurship. The unique data implemented allow the authors to identify genuinely new ventures as compared to those associated with reorganizations of existing businesses, thereby overcoming much of data deficiencies in previous studies. In addition, data are distributed on Swedish functional labor market regions.

scholarly journals Microeconomic Flexibility in India and Pakistan: Employment Adjustment at the Firm Level

2009 ◽  
Vol 14 (Special Edition) ◽  
pp. 17-27
Author(s):  
Theresa Chaudhry
Keyword(s):  
Food Processing ◽  
Creative Destruction ◽  
Firm Level ◽  
Speed Of Adjustment ◽  
Employment Adjustment ◽  
Level Data ◽  
Key Sectors ◽  
Firm Level Data

In this paper, we look at the pace at which firms adjust their employment levels as a measure of “microeconomic flexibility.” Flexibility aids in creative destruction processes, where less efficient establishments recede and dynamic firms can rapidly expand. Following the techniques used by Caballero, Engel, and Micco (2004), we use firm-level data from India and Pakistan to estimate the proportion of the gap closed in a year between desired and actual employment. The results for the proportion of the gap closed for India were 0.46 in 2001 and 0.45 in 2000. For Pakistan, we estimated the proportion of the gap closed as 0.2 in 2001 and 0.53 in 2000. The results for 2001 were much lower than expected (and lower than previous estimates for both countries), possibly due to the events of 9/11. Pakistan compared favorably to India in various key sectors, including chemicals, food processing, and garments. Exporters did not seem to have a quicker speed of adjustment.

The factor of creative destruction in modern economic growth models and growth policy

2019 ◽  
pp. 95-118 ◽  
Author(s):  
Daniel D. Katukov ◽  
Viacheslav E. Malygin ◽  
Nataliya V. Smorodinskaya
Keyword(s):  
Growth Models ◽  
Dynamic Balance ◽  
Market Competition ◽  
Creative Destruction ◽  
Innovation Activity ◽  
Competitive Strategies ◽  
Firm Level ◽  
High Performing ◽  
The Difference ◽  
Free Environment

The paper examines the place of Schumpeterian idea of creative destruction in endogenous growth models, as well as its relevance for national competitive strategies under the ‘new normal’ situation. The difference between Schumpeterian growth models and the model elaborated by P. Romer is revealed. The paper analyzes modern interpretation of creative destruction as a process displacing low-performing firms by high-performing ones, as well as old products and technologies by more innovative ones through a market competition. It is shown that this process accelerates the dynamics of firms and the turnover of resources in an economy, thus leading to reallocation of investments and knowledge to the most productive agents. The paper highlights the importance of sustaining a dynamic balance between measures stimulating a firm-level innovation activity and measures supporting a barrier-free environment for an effective resource allocation in the economy. We consider cases of several developed and developing countries, which demonstrate negative implications of underutilized advantages of creative destruction and the risks of selective supporting policies towards exclusively high-growing firms. We conclude that without restarting the process of creative destruction in the Russian economy the national efforts to enhance competitiveness and growth may turn unproductive.

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