Plant-level dynamics and aggregate productivity growth in the Turkish meat-processing industry: Evidence from longitudinal data

Abstract

The authors examine how plant-level dynamics contribute to aggregate productivity growth in the Turkish meat-processing industry. An aggregate productivity decomposition approach that utilizes plant-level longitudinal data is used to achieve this goal. Their results are consistent with the empirical literature in the sense that productivity enhancement within existing plants is the main source of aggregate productivity growth in this sector. However, their analysis generally suggests that plants that exit the meat-processing industry tend to be more productive than entering plants, especially in the posteconomic crisis period studied. Even though the latter insight is not consistent with the existing empirical literature, they show that these results tend to support R. Caballero and M. Hammour's (2000) contention that institutional factors such as industry structure (i.e., mature vs. infant industry) and economic crisis conditions (i.e., pre- vs. postcrisis periods) affect the nature of plant dynamics' contributions to aggregate productivity growth. Overall, the study's results reveal that industry-specific institutional factors must be taken into consideration when shaping policies aimed to improve and sustain aggregate productivity growth. [JEL Classifications: D24, L25, O12]. © 2006 Wiley Periodicals, Inc. Agribusiness 22: 91-107, 2006.