Industry dynamics and high-growth firms' contribution to productivity growth

Marta Bisztray, Francesca de Nicola and Balazs Murakozy

No 2047, CERS-IE WORKING PAPERS from Institute of Economics, Centre for Economic and Regional Studies

Abstract: This paper investigates the contribution of high-growth firms (HGFs) to aggregate productivity growth. Four stylized facts emerge. First, HGFs mainly contribute to productivity growth during their high-growth phase but not afterwards. Second, their contribution varies substantially across industries and it is not necessarily positive. Third, the impact on productivity depends on how HGFs are defined. Output-based HGFs substantially outperform employment-based ones in terms of their productivity contribution while the difference in terms of job creation is low. Fourth, HGFs' contribution to productivity is higher in industries where industry dynamics favor growing firms, captured by the strength of reallocation and the relationship between productivity growth and size growth. We present a simple model to show that these patterns arise naturally under realistic correlation structures. Our results suggest that policies supporting HGFs may focus on firms increasing their sales, and these can effectively be complemented by framework policies promoting efficient reallocation

Keywords: high-growth firms; productivity growth; reallocation; industry dynamics (search for similar items in EconPapers)
JEL-codes: L25 O40 (search for similar items in EconPapers)
Pages: 34 pages
Date: 2020-11
New Economics Papers: this item is included in nep-eff, nep-ent and nep-tid
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://www.mtakti.hu/wp-content/uploads/2020/11/CERSIEWP202047.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:has:discpr:2047

Access Statistics for this paper

More papers in CERS-IE WORKING PAPERS from Institute of Economics, Centre for Economic and Regional Studies Contact information at EDIRC.
Bibliographic data for series maintained by Nora Horvath ( this e-mail address is bad, please contact ).