W. E. Upjohn Institute for Employment Research, Kalamazoo, Mich. >
Upjohn Institute Working Papers, W. E. Upjohn Institute for Employment Research >
Please use this identifier to cite or link to this item:
| || |
|Title:||Understanding the contributions of reallocation to productivity growth: Lessons from a comparative firm-level analysis |
|Authors:||Brown, J. David|
Earle, John S.
|Issue Date:||2008 |
|Series/Report no.:||Upjohn Institute Working Paper 08-141|
|Abstract:||We analyze comprehensive manufacturing firm data to measure the contribution of interfirm employment reallocation to aggregate productivity growth during the socialist and reform periods in six transition economies. Modifying a standard decomposition technique to better reflect the role of firm entry, we find that reallocation rates and productivity contributions are very low under socialism, but they rise dramatically after reforms, and productivity contributions greatly exceed those observed in market economies. Early in transition, more reform is associated with larger contributions from reallocation, but later, and on average over the whole transition, this relationship is reversed. Though reallocation rates are larger in faster reforming economies, higher productivity dispersion in slower reformers creates higher productivity gains for a given volume of reallocation. The results imply that reallocation should be viewed as necessary regular maintenance for a well-functioning economy, and particularly large productivity contributions tend to reflect previous neglect more than current virtue.|
|Document Type:||Working Paper|
|Appears in Collections:||Upjohn Institute Working Papers, W. E. Upjohn Institute for Employment Research|
Download bibliographical data as:
Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.