Measuring Productivity Dispersion

Abstract

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in AbstractMeasuring the dispersion of productivity or efficiency across firms in a market or industry is rife with methodological issues. Nevertheless, the existence of considerable dispersion now is well documented and widely accepted. Less well understood are the economic features and mechanisms underlying the magnitude of dispersion and how dispersion varies over time or across markets. On the one hand, selection mechanisms in both output and input markets should favor the most productive units through resource reallocation, thereby reducing dispersion. On the other hand, innovation and technological uncertainty tend to increase dispersion. This chapter presents a guide to measurement of dispersion and provides empirical evidence from a selection of countries and industries using a variety of methodologies.JEL Codes: D2, O3

Banks, Credit Reallocation, and Creative Destruction

“…Production: We calibrate output (TFP) y h and y ℓ to match the firm-level productivity dispersion and leverage in the firm sector. In line with empirical evidence (Syverson, 2004a,b;Bartelsman and Wolf, 2018), the output of of h-firms is 45% higher compared to ℓ-firms, y h = 1.45 • y ℓ . Given this output ratio, we calibrate the output level y ℓ .…”

The impact of new varieties on aggregate productivity growth*

“…At the aggregate level, productivity growth can also be driven by reallocation effects (i.e., a change in the composition of firms in the economy). If the dispersion of productivity across establishments and industries is high (Bartelsman and Wolf, 2018), then aggregate productivity can increase substantially if resources are reallocated from low‐ to high‐productivity firms. Firm turnover represents one such means of resource reallocation.…”

Testing the Superstar Firm Hypothesis

“…5 Table B.3 in the Appendix shows the results of the production function estimations 6 We follow the literature by using percentiles or deciles for separating the top productive firms. See, among others, Andrews et al (2015Andrews et al ( , 2016; Bartelsman and Zoltan (2017). Due to data limitations, we must use the top decile.…”