1887

OECD Economics Department Working Papers

Working papers from the Economics Department of the OECD that cover the full range of the Department’s work including the economic situation, policy analysis and projections; fiscal policy, public expenditure and taxation; and structural issues including ageing, growth and productivity, migration, environment, human capital, housing, trade and investment, labour markets, regulatory reform, competition, health, and other issues.

The views expressed in these papers are those of the author(s) and do not necessarily reflect those of the OECD or of the governments of its member countries.

English, French

Firm Dynamics and Productivity Growth

A Review of Micro Evidence from OECD Countries

This paper surveys recent empirical studies exploring aggregate productivity growth based on firm dynamics, focusing on micro-data from OECD countries. Aggregate productivity growth can be analysed as a sum of two separate processes. i) Changes in productivity in individual firms at a given size (relative to market). And, ii) a reallocation process due to compositional effects arising from the expansion and contraction of existing firms as well as from entry and exit of firms (namely, firm dynamics). After reviewing theoretical explanations and empirical methods for firm dynamics and productivity growth, the paper looks into major findings from the manufacturing sector under three subsections: firm dynamics, productivity correlates, and productivity decomposition. The paper also reviews methodological issues and some findings from the emerging literature of empirical studies on the service sector ...

English

Keywords: firm, micro data, productivity, OECD
JEL: O30: Economic Development, Innovation, Technological Change, and Growth / Innovation; Research and Development; Technological Change; Intellectual Property Rights / Innovation; Research and Development; Technological Change; Intellectual Property Rights: General; O12: Economic Development, Innovation, Technological Change, and Growth / Economic Development / Microeconomic Analyses of Economic Development; D21: Microeconomics / Production and Organizations / Firm Behavior: Theory; O47: Economic Development, Innovation, Technological Change, and Growth / Economic Growth and Aggregate Productivity / Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence; D24: Microeconomics / Production and Organizations / Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
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