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on Technology and Industrial Dynamics |
| By: | Giulio Bottazzi (LEM - Laboratory of Economics and Management - Sant'Anna School of Advanced Studies); Giovanni Dosi (LEM - Laboratory of Economics and Management - Scuola Superiore Sant'Anna); Nadia Jacoby (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Panthéon-Sorbonne - Paris I); Angelo Secchi (LEM - Laboratory of Economics and Management - Sant'Anna School of Advanced Studies); Federico Tamagni (LEM - Laboratory of Economics and Management - Sant'Anna School of Advanced Studies) |
| Abstract: | Diverse theories of industry dynamics predict heterogeneity in production efficiency to be the driver of firms' growth, survival and industrial change, either through a direct link between efficiency and growth, or through an indirect effect via profitabilities, as more productive firms can enjoy higher profit margins which, under imperfect capital markets, allow them to invest and grow more. Does the empirical evidence bear such predictions? This paper explores the dynamics of selection and reallocation through an investigation of the productivity-profitability-growth relations at the firm level. Exploiting large panels of Italian and French industrial firms, we find that heterogeneity in efficiencies primarily yield persistent profitability differentials, whereas the relationships of corporate growth with either productivity or profitability appear much weaker, if at all existent. This suggests that selection forces are much less strong than usually assumed. Rather, the links between efficiency and corporate growth seem profoundly mediated by large degrees of behavioural freedom. The results robustly applies across different industrial sectors and across the two countries. |
| Date: | 2009–10–06 |
| URL: | http://d.repec.org/n?u=RePEc:hal:cesptp:hal-00422142_v1&r=tid |
| By: | Alain Gabler; Omar Licandro |
| Abstract: | This paper contributes to the literature on both embodied technical progress and firm dynamics, by formulating an endogenous growth model where selection and imitation play a fundamental role in helping capital good producers to learn about the productivity of technologies embodied in new plants. By calibrating the model to some key aggregates particularly relevant for the embodied capital literature, among them the growth rate of the relative investment price, the model quantitatively replicates the main facts associated to firm dynamics, such as the entry rate and the tail index of the establishment size distribution. In line with the previous literature, it also predicts a contribution to productivity growth of embodied technical progress and selection of around 60% |
| Keywords: | endogenous growth; investment- specific technological change; selection and imitation; firm entry and exit. |
| JEL: | B52 O3 O41 |
| Date: | 2009–09–30 |
| URL: | http://d.repec.org/n?u=RePEc:aub:autbar:782.09&r=tid |