Revisiting productivity growth accounting decompositions

Filippo Massari

Research in Economics, 2025, vol. 79, issue 3

Abstract: This paper proposes a modification to popular productivity growth accounting decompositions useful for calibrating endogenous growth models. Specifically, the within-firm component is further decomposed to show the covariance of firms’ productivity growth rates and relative levels. This moment provides information about the systematic churning within the relative productivity distribution that, in endogenous growth models, stems from firms’ investment behavior, thus affecting aggregate income growth. This decomposition allows assessing modeling assumptions and quantifying parameters that introduce or affect differential incentives to grow across firms.

Keywords: Productivity growth accounting; Aggregate productivity; Average productivity; Growth decompositions (search for similar items in EconPapers)
JEL-codes: D24 E24 O47 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:reecon:v:79:y:2025:i:3:s1090944325000328

DOI: 10.1016/j.rie.2025.101055

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