Competition, Firm Turnover and Productivity Growth
Economic Analysis (EA) Research Paper Series from Statistics Canada, Analytical Studies Branch
This paper investigates the extent to which productivity growth is the result of firm turnover as output is shifted from one firm to another, driven by the competitive process. Turnover occurs as some firms gain market share and others lose it. Some of the resulting turnover is due to entry and exit. Another part arises from growth and decline in incumbent continuing firms. This paper proposes a method for measuring the impact of firm turnover on productivity growth and shows that it is far more important than many previous empirical studies have concluded. It argues that firm turnover associated with competition is the main source of aggregate labour productivity growth in Canadian manufacturing industries.
Keywords: Business performance and ownership; Economic accounts; Entry; exit; mergers and growth; Productivity accounts (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-com, nep-eff and nep-ent
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Persistent link: https://EconPapers.repec.org/RePEc:stc:stcp5e:2006042e
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