Declining Dynamism, Allocative Efficiency, and the Productivity Slowdown

Ryan Decker, John Haltiwanger, Ron Jarmin and Javier Miranda

American Economic Review, 2017, vol. 107, issue 5, 322-26

Abstract: A large literature documents declining measures of business dynamism including high-growth young firm activity and job reallocation. A distinct literature describes a slowdown in the pace of aggregate labor productivity growth. We relate these patterns by studying changes in productivity growth from the late 1990s to the mid 2000s using firm-level data. We find that diminished allocative efficiency gains can account for the productivity slowdown in a manner that interacts with the within-firm productivity growth distribution. The evidence suggests that the decline in dynamism is reason for concern and sheds light on debates about the causes of slowing productivity growth.

JEL-codes: D22 D24 D61 J24 L25 (search for similar items in EconPapers)
Date: 2017
Note: DOI: 10.1257/aer.p20171020
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Citations: View citations in EconPapers (123)

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Working Paper: Declining Dynamism, Allocative Efficiency, and the Productivity Slowdown (2017)
Working Paper: Declining Dynamism, Allocative Efficiency, and the Productivity Slowdown (2017)
Working Paper: Declining Dynamism, Allocative Efficiency, and the Productivity Slowdown (2017)
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