scholarly journals From Micro to Macro: A Note on the Analysis of Aggregate Productivity Dynamics Using Firm-Level Data

2021 ◽  
Vol 2021 (1314) ◽  
pp. 1-36
Author(s):  
Daniel A. Dias ◽  
◽  
Carlos Robalo Marques ◽  
Keyword(s):  
Labor Productivity ◽  
Productivity Growth ◽  
Empirical Literature ◽  
Aggregate Productivity ◽  
Firm Level ◽  
Level Data ◽  
Firm Level Data ◽  
The Mean ◽  
Productivity Dynamics

In the empirical literature, the analysis of aggregate productivity dynamics using firm-level productivity has mostly been based on changes in the mean of log-productivity. This paper shows that there can be substantial quantitative and qualitative differences in the results relative to when the analysis is based on changes in the mean of productivity, and discusses the circumstances under which such differences are likely to happen. We use firm-level data for Portugal for the period 2006-2015 to illustrate the point. When the mean of productivity is used, we estimate that TFP and labor productivity for the whole economy increased by 17.7 percent and 5.2 percent, respectively, over this period. But, when the mean of log-productivity is used, we estimate that these two productivity measures declined by 4.3 percent and 1.8 percent, respectively. Similarly disparate results are obtained for productivity decompositions regarding the contributions for productivity growth of surviving, entering and exiting firms.

scholarly journals Declining Dynamism, Allocative Efficiency, and the Productivity Slowdown

2017 ◽  
Vol 107 (5) ◽  
pp. 322-326 ◽  
Author(s):  
Ryan A. Decker ◽  
John Haltiwanger ◽  
Ron S. Jarmin ◽  
Javier Miranda
Keyword(s):  
Productivity Growth ◽  
Allocative Efficiency ◽  
High Growth ◽  
Firm Level ◽  
Productivity Slowdown ◽  
Level Data ◽  
Firm Level Data ◽  
Job Reallocation ◽  
Firm Activity ◽  
Growth Distribution

A large literature documents declining measures of business dynamism including high-growth young firm activity and job reallocation. A distinct literature describes a slowdown in the pace of aggregate labor productivity growth. We relate these patterns by studying changes in productivity growth from the late 1990s to the mid 2000s using firm-level data. We find that diminished allocative efficiency gains can account for the productivity slowdown in a manner that interacts with the within-firm productivity growth distribution. The evidence suggests that the decline in dynamism is reason for concern and sheds light on debates about the causes of slowing productivity growth.

scholarly journals Stylized Facts on Productivity Growth: Evidence from Firm-Level Data in Croatia

2014 ◽  
Author(s):  
Mariana Iootty ◽  
Paulo Correa ◽  
Sonja Radas ◽  
Bruno Škrinjarić
Keyword(s):  
Productivity Growth ◽  
Stylized Facts ◽  
Firm Level ◽  
Level Data ◽  
Firm Level Data

scholarly journals Formalization and productivity: firm-level evidence from Viet Nam

2020 ◽  
Author(s):  
Jann Lay ◽  
Tevin Tafese
Keyword(s):  
Productivity Growth ◽  
Manufacturing Sector ◽  
Viet Nam ◽  
Aggregate Productivity ◽  
Entry And Exit ◽  
Formal Sector ◽  
Policy Changes ◽  
Firm Level ◽  
Productivity Dynamics ◽  
Firm Entry And Exit

Using a firm-level panel dataset on private small- and medium-sized enterprises (SMEs) in Viet Nam’s manufacturing sector, this paper examines productivity dynamics of formal and informal firms. We decompose productivity changes into changes within and between formal and informal firms. We assess the contributions of firm entry and exit as well as informal–formal transitions. Our results show that productivity is considerably lower and misallocation more prevalent in the informal than in the formal sector. Yet, formalizing firms in Viet Nam make an important contribution to aggregate productivity growth among manufacturing SMEs, growing faster than other firms and increasing efficiency. We identify two ‘regimes’ of formalization. Until early 2010, more productive (previously) informal firms formalize. Policy changes and accelerated formalization then alter the characteristics of formalizers, as less productive firms become formal. While this formalization wave depresses average formal total factor productivity growth, the overall productivity effect is positive.

Measuring the Contribution of Intangibles to Productivity Growth: A Disaggregate Analysis of Japanese Firms

2008 ◽  
Vol 11 (02) ◽  
pp. 151-186 ◽  
Author(s):  
Pablo Gonzalo Ramirez ◽  
Toyohiko Hachiya
Keyword(s):  
Productivity Growth ◽  
Intangible Assets ◽  
Marginal Contribution ◽  
Critical Factors ◽  
Organizational Capital ◽  
Firm Level ◽  
Japanese Firms ◽  
Level Data ◽  
Firm Level Data ◽  
Disaggregate Analysis

In this study we examined Japanese firm-level data to test whether increments in intangible assets will leads to differences in productivity growth. Our results show that the marginal contribution of inputs varies a greatly among sectors, industries and depending on firm's size. Therefore, marginal increments in intangibles investments are not always associated with productivity growth suggesting that when intangibles exceed a threshold, additional investments could be inefficient. We conclude that among intangibles, firm-specific organizational capital and advertising are two of the critical factors in determining the productivity growth.

scholarly journals Heterogeneous Markups, Growth, and Endogenous Misallocation

Econometrica ◽  
2020 ◽  
Vol 88 (5) ◽  
pp. 2037-2073 ◽  
Author(s):  
Michael Peters
Keyword(s):  
United States ◽  
Market Power ◽  
Productivity Growth ◽  
Firm Dynamics ◽  
The United States ◽  
Equilibrium Outcome ◽  
Firm Level ◽  
Competitive Effects ◽  
Level Data ◽  
Firm Level Data

Markups vary systematically across firms and are a source of misallocation. This paper develops a tractable model of firm dynamics where firms' market power is endogenous and the distribution of markups emerges as an equilibrium outcome. Monopoly power is the result of a process of forward‐looking, risky accumulation: firms invest in productivity growth to increase markups in their existing products but are stochastically replaced by more efficient competitors. Creative destruction therefore has pro‐competitive effects because faster churn gives firms less time to accumulate market power. In an application to firm‐level data from Indonesia, the model predicts that, relative to the United States, misallocation is more severe and firms are substantially smaller. To explain these patterns, the model suggests an important role for frictions that prevent existing firms from entering new markets. Differences in entry costs for new firms are less important.

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