Firm Entry and Exit and Aggregate Growth

Jose Asturias, Sewon Hur, Timothy Kehoe and Kim Ruhl

American Economic Journal: Macroeconomics, 2023, vol. 15, issue 1, 48-105

Abstract: Applying the Foster, Haltiwanger, and Krizan (2001) decomposition to plant-level manufacturing data from Chile and Korea, we find that the entry and exit of plants account for a larger fraction of aggregate productivity growth during periods of fast GDP growth. To analyze this relationship, we develop a model of firm entry and exit based on Hopenhayn (1992). When we introduce reforms that reduce entry costs or reduce barriers to technology adoption into a calibrated model, we find that the entry and exit terms in the FHK decomposition become more important as GDP grows rapidly, just as they do in the data from Chile and Korea.

JEL-codes: D24 E23 L13 L60 O14 O32 O47 (search for similar items in EconPapers)
Date: 2023
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Citations: View citations in EconPapers (10)

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Related works:
Working Paper: Firm Entry and Exit and Aggregate Growth (2021)
Working Paper: Firm Entry and Exit and Aggregate Growth (2020)
Working Paper: Firm Entry and Exit and Aggregate Growth (2018)
Working Paper: Firm Entry and Exit and Aggregate Growth (2017)
Working Paper: Firm Entry and Exit and Aggregate Growth (2017)
Working Paper: Firm Entry and Exit and Aggregate Growth (2016)
Working Paper: Firm Entry and Exit and Aggregate Growth (2015)
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DOI: 10.1257/mac.20200376

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