Every Cloud has a Silver Lining: Cleansing Effects of the Portuguese Financial Crisis

Daniel Dias and Carlos Marques

No 1250, International Finance Discussion Papers from Board of Governors of the Federal Reserve System (U.S.)

Abstract: Using firm-level data, this paper shows that the Portuguese financial crisis was a period of intensified productivity-enhancing reallocation. Aggregate productivity gains, both in manufacturing and services, came from relatively higher contributions of entering and exiting firms and from reallocation of resources between surviving firms. At the microlevel, the crisis reduced the probability of survival for high- and low-productivity firms, but it hit low-productivity firms disproportionately harder. We also found important heterogeneous effects across economic sectors regarding input reallocation that underline the importance of using data for the entire economy whenever similar studies are conducted.

Keywords: Productivity; Firm-level data; Entry; Exit; Survival (search for similar items in EconPapers)
JEL-codes: D24 E32 L25 O47 (search for similar items in EconPapers)
Pages: 57
Date: 2019-06-05
New Economics Papers: this item is included in nep-bec, nep-eff, nep-fdg, nep-mac and nep-sbm
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Journal Article: Every Cloud Has a Silver Lining: Cleansing Effects of the Portuguese Financial Crisis (2021)
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Persistent link: https://EconPapers.repec.org/RePEc:fip:fedgif:1250

DOI: 10.17016/IFDP.2019.1250

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