Arbeitspapier
Allocation and industry productivity: Accounting for firm turnover
Recent macroeconomic literature has stressed the importance of resource allocation between firms for aggregate productivity. An important issue, therefore, is how to measure allocative efficiency. We compare popular indicators of allocative efficiency, paying special attention to firm turnover. We first show how entering and exiting firms contribute to aggregate productivity and to the Olley-Pakes (OP) covariance component, which is currently the most popular measure of allocative efficiency. Our data cover essentially all firms and plants in the Finnish business sector. We then build a model of firm dynamics with endogenous turnover that is consistent with the main patterns of our empirical results and use it to test how well alternative indicators capture different allocation distortions. Our results demonstrate how and why commonly used indicators fail to capture certain distortions because of endogenous changes in firm turnover.
- Language
-
Englisch
- Bibliographic citation
-
Series: ETLA Working Papers ; No. 11
- Classification
-
Wirtschaft
Macroeconomics: Production
Industrial Organization and Macroeconomics: Industrial Structure and Structural Change; Industrial Price Indices
Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
- Subject
-
productivity
firm dynamics
reallocation
- Event
-
Geistige Schöpfung
- (who)
-
Maliranta, Mika
Määttänen, Niku
- Event
-
Veröffentlichung
- (who)
-
The Research Institute of the Finnish Economy (ETLA)
- (where)
-
Helsinki
- (when)
-
2013
- Handle
- Last update
-
10.03.2025, 11:46 AM CET
Data provider
This object is provided by:
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
Object type
- Arbeitspapier
Associated
- Maliranta, Mika
- Määttänen, Niku
- The Research Institute of the Finnish Economy (ETLA)
Time of origin
- 2013
Other Objects (12)
Productivity growth, firm turnover and new varieties
Reallocation, firm turnover, and efficiency: selection on productivity or profitability?
Firm Turnover, Restructuring and Labour Productivity in Transition: The Case of Poland
Firm-level evidence on productivity differentials, turnover, and exports in Taiwanese manufacturing
Firm Turnover, Restructuring and Labour Productivity in Transition: The Case of Poland
Mind the neighbors : the impact of productivity and location on firm turnover
The Productivity Consequences of Political Turnover: Firm-Level Evidence from Ukraine's Orange Revolution
On measuring the contribution from firm turnover to aggregate productivity growth. Selection on profitability and not productivity
Creative destruction and policy reforms : changing productivity effects of firm turnover in Moroccan manufacturing
Mandated Works Councils and Firm Performance: Labor Productivity and Personnel Turnover in German Establishments
Essays in applied economics : how changes in firm policies affect productivity and labor turnover
Aging, labor turnover and firm performance
Productivity growth, firm turnover and new varieties
Reallocation, firm turnover, and efficiency: selection on productivity or profitability?
Firm Turnover, Restructuring and Labour Productivity in Transition: The Case of Poland
Firm-level evidence on productivity differentials, turnover, and exports in Taiwanese manufacturing
Firm Turnover, Restructuring and Labour Productivity in Transition: The Case of Poland
Mind the neighbors : the impact of productivity and location on firm turnover
The Productivity Consequences of Political Turnover: Firm-Level Evidence from Ukraine's Orange Revolution
On measuring the contribution from firm turnover to aggregate productivity growth. Selection on profitability and not productivity
Creative destruction and policy reforms : changing productivity effects of firm turnover in Moroccan manufacturing
Mandated Works Councils and Firm Performance: Labor Productivity and Personnel Turnover in German Establishments
Essays in applied economics : how changes in firm policies affect productivity and labor turnover
Aging, labor turnover and firm performance
Productivity growth, firm turnover and new varieties
Reallocation, firm turnover, and efficiency: selection on productivity or profitability?
Firm Turnover, Restructuring and Labour Productivity in Transition: The Case of Poland
Firm-level evidence on productivity differentials, turnover, and exports in Taiwanese manufacturing
Firm Turnover, Restructuring and Labour Productivity in Transition: The Case of Poland
Mind the neighbors : the impact of productivity and location on firm turnover
The Productivity Consequences of Political Turnover: Firm-Level Evidence from Ukraine's Orange Revolution
On measuring the contribution from firm turnover to aggregate productivity growth. Selection on profitability and not productivity
Creative destruction and policy reforms : changing productivity effects of firm turnover in Moroccan manufacturing
Mandated Works Councils and Firm Performance: Labor Productivity and Personnel Turnover in German Establishments
Essays in applied economics : how changes in firm policies affect productivity and labor turnover