Dosi, Giovanni Moschella, Daniele Pugliese, Emanuele Tamagni, Federico
Year of Publication:
LEM Working Paper Series 2013/15
This paper presents a broad set of empirical regularities about selection and market shares reallocation 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 between-firms reallocation of shares. The evidence corroborates that within-firm learning prevails over competitive selection. Second, we address the strength of reallocation by exploring if and to what extent firm growth rates are shaped by relative productivity levels in deviation from industry average and by the over time variation of productivities themselves. The econometric analysis accounts for both the dynamic dimension of the selection process and idiosyncratic firm-specific factors. We find that changes, rather than relative levels, are the dominant productivity-related determinant of relative growth rates.