Economics at your fingertips  

Job creation in Colombia vs the U.S.: "up or out dynamics" meets "the life cycle of plants"

Marcela Eslava (), John Haltiwanger and Alvaro Pinzón ()

Documentos CEDE from Universidad de los Andes - CEDE

Abstract: Following the seminal work of Hsieh and Klenow (2014), there is growing consensus that a key difference between the U.S. and developing economies is that the latter exhibit slower employment growth over the life cycle of the average productive establishment. At the same time, the distribution of startup employment growth in the U.S. is highly skewed, with extraordinary growth establishments driving average employment growth, giving rise to the "up or out dynamics" label (Haltiwanger, Jarmin and Miranda, 2013). We look at the entire population of non-micro manufacturing establishments in Colombia vs. the US and find that slower average life cycle growth in Colombia is driven by a less enthusiastic contribution of extraordinary growth plants and less dynamic selection of young underperforming plants. As a consequence, the size distribution of non-micro plants exhibits more concentration in small-old plants in Colombia, both in unweighted and employment-weighted bases. These findings point to a shortage of high-growth entrepreneurship and a relatively high likelihood of long-run survival for small, likely unproductive plants, as two key elements at the heart of the development problem. An extreme concentration of resources in micro plants is the other distinguishing feature of the Colombian manufacturing sector vis a vis the US'.

Keywords: entrepreneurship; SMEs; employment growth (search for similar items in EconPapers)
JEL-codes: O14 O47 (search for similar items in EconPapers)
Pages: 45
Date: 2019-02-05
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5) Track citations by RSS feed

Downloads: (external link)

Related works:
Working Paper: Job creation in Colombia vs the U.S.: “up or out dynamics” meets “the life cycle of plants” (2019) Downloads
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:

Access Statistics for this paper

More papers in Documentos CEDE from Universidad de los Andes - CEDE
Bibliographic data for series maintained by Universidad De Los Andes-Cede ().

Page updated 2021-09-02
Handle: RePEc:col:000089:017174