EconStor >
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:

http://hdl.handle.net/10419/64362
  
Title:Understanding the contributions of reallocation to productivity growth: Lessons from a comparative firm-level analysis PDF Logo
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.
Subjects:productivity
reallocation
industry dynamics
entry
exit
creative destruction
reform
transition
Georgia
Hungary
Lithuania
Romania
Russia
Ukraine
JEL:E32
O47
P23
Document Type:Working Paper
Appears in Collections:Upjohn Institute Working Papers, W. E. Upjohn Institute for Employment Research

Files in This Item:
File Description SizeFormat
59320896X.pdf268.85 kBAdobe PDF
No. of Downloads: Counter Stats
Download bibliographical data as: BibTeX
Share on:http://hdl.handle.net/10419/64362

Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.