Productivity and Reallocation: Evidence from the Universe of Italian Firms

Andrea Linarello and Andrea Petrella ()

International Productivity Monitor, 2017, vol. 32, 116-136

Abstract: This article investigates the contribution of allocative efficiency to aggregate labour productivity growth in Italy between 2005 and 2013. Exploiting a unique dataset that covers the universe of firms, we find that allocative efficiency increased during the period of observation. We show that the dynamics of aggregate labour productivity benefited from the reallocation of resources among continuing firms and from the net effect of business demography. Among industries, we find that reallocation has been stronger in industries that are more exposed to import competition from developing countries. Moreover, we document that the observed adjustments have not evenly affected all firms across the productivity distribution: selection has become tougher for firms belonging to the lower tail, forcing the exit of the least productive firms and favoring the reallocation of the workforce to the best performing ones.

Keywords: Productivity; OECD; Policies; Global Productivity; Total Factor Productivity; Wages; aggregate labour productivity; firms competition; resource allocation (search for similar items in EconPapers)
JEL-codes: D24 D4 G14 H32 O1 O47 O52 (search for similar items in EconPapers)
Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (13)

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Working Paper: Productivity and reallocation: evidence from the universe of Italian firms (2016)
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