Industry structure dynamics and productivity growth

Lech Kalina
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Lech Kalina: Warsaw School of Economics

No 67, Working Papers from Department of Applied Econometrics, Warsaw School of Economics

Abstract: Economic theory typically predicts that productivity should increase when a firm’s market is expanding since the benefits of reducing costs are higher when spread across a larger market. On the other hand there is a strong line of research stressing the positive impact of increasing competition and claiming that productivity should jump when a firm’s market is being squeezed by new compe titors. This paper investigates the effects of industry structure dynamics on productivity growth on panel data from industries of ten European countries. The econometric results provide empirical support for p ositive impact of less fragmented market stru ctures on productivity, however results also point out the important role which dynamics of firms turnover play in industry performance.

JEL-codes: D4 L1 (search for similar items in EconPapers)
Pages: 18
Date: 2013-09-04
New Economics Papers: this item is included in nep-bec, nep-com, nep-eff, nep-fdg and nep-sbm
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