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The OECD Directorate for Science, Technology and Innovation (STI) develops evidence-based policy advice on the contribution of science, technology and industry to well-being and economic growth. STI Policy Papers cover a broad range of topics, including industry and globalisation, innovation and entrepreneurship, scientific R&D and emerging technologies. These reports are officially declassified by an OECD Committee.
What Drives the Dynamics of Business Growth?
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- Albert Bravo-Biosca1, Chiara Criscuolo2, Carlo Menon2
- Author Affiliations
- 1: Nesta, United Kingdom
- 2: OECD, France
- 04 Apr 2013
- Bibliographic information
Differences in the dynamisms of economies are persistent. Notwithstanding the growing body of evidence documenting these large cross-country differences, our understanding of what drives them is still rather limited. This paper seeks to help close this gap. Using unique data for ten countries the analysis sheds light on the factors that shape the distribution of firm growth and on what role policies play in driving cross-country differences. The paper provides new evidence on the link of labour market regulation, bankruptcy legislation, financial market development and R&D support policies with growth dynamics. The study goes beyond looking at differences in average growth rates as it analyses changes in the whole distribution of firms.