The best versus the rest: divergence across firms during the global productivity slowdown

Chiara Criscuolo, Dan Andrews and Peter Gal

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: We document that labor productivity of the globally most productive firms – the “frontier” – has diverged from all other firms – the “rest” – throughout the 2000s. This divergence remains after controlling for capital intensity and markups, and is strongest in ICT services, indicative of “winnertakes-all” dynamics. We also find weakening catch-up and market selection below the frontier, which can explain why this divergence at the firm level is linked to weaker aggregate productivity. The divergence is found to be stronger in industries where product market regulations are less competition friendly, highlighting the need for regulatory policy to improve the contestability of markets.

Keywords: firm dynamics; regulation; knowledge diffusion; technological change; productivity (search for similar items in EconPapers)
JEL-codes: M13 O30 O40 (search for similar items in EconPapers)
Pages: 100 pages
Date: 2019-08
New Economics Papers: this item is included in nep-eff, nep-ict, nep-ino and nep-tid
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (19)

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http://eprints.lse.ac.uk/103405/ Open access version. (application/pdf)

Related works:
Working Paper: The best versus the rest: divergence across firms during the global productivity slowdown (2019)
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Persistent link: https://EconPapers.repec.org/RePEc:ehl:lserod:103405

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