On the Ubiquity of Declining Business Dynamism

David Hummels and Kan Yue

No 32637, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Recent work documents declining business dynamism in establishment data, and points to difficulty in reallocating resources across firms as an important cause. Using import data, we document declining market dynamism that bears a striking resemblance to establishment-level findings and holds for the vast majority of countries and products. Entry rates and the reallocation of market shares fall over time. Young exporters experience rising prices, falling market shares, and reduced skewness in growth rates relative to older exporters. A heterogeneous firm model with additive productivity shocks and growing expenditures, but no reallocation of resources across exporters, can generate all these facts.

JEL-codes: D22 F14 L23 O40 (search for similar items in EconPapers)
Date: 2024-06
New Economics Papers: this item is included in nep-ifn, nep-inv and nep-mac
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