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Author: Jose Asturias Publisher: ISBN: Category : Industrial organization (Economic theory) Languages : en Pages : 39
Book Description
Using data from Chile and Korea, we find that a larger fraction of aggregate productivity growth is due to firm entry and exit during fast-growth episodes compared to slow-growth episodes. Studies of other countries confirm this empirical relationship. We develop a model of endogenous firm entry and exit based on Hopenhayn (1992). Firms enter with efficiencies drawn from a distribution whose mean grows over time. After entering, a firm’s efficiency grows with age. In the calibrated model, reducing entry costs or barriers to technology adoption generates the pattern we document in the data. Firm turnover is crucial for rapid productivity growth.
Author: Jose Asturias Publisher: ISBN: Category : Industrial organization (Economic theory) Languages : en Pages : 39
Book Description
Using data from Chile and Korea, we find that a larger fraction of aggregate productivity growth is due to firm entry and exit during fast-growth episodes compared to slow-growth episodes. Studies of other countries confirm this empirical relationship. We develop a model of endogenous firm entry and exit based on Hopenhayn (1992). Firms enter with efficiencies drawn from a distribution whose mean grows over time. After entering, a firm’s efficiency grows with age. In the calibrated model, reducing entry costs or barriers to technology adoption generates the pattern we document in the data. Firm turnover is crucial for rapid productivity growth.
Author: W. Erwin Diewert Publisher: ISBN: Category : Industrial productivity Languages : en Pages : 29
Book Description
The problem of assessing the impact of firm entry and exit on aggregate productivity growth is addressed. The proposed method overcomes some problems with currently proposed methods. The paper also addresses some of the problems involved in aggregating outputs and inputs when firms enter and exit so that the one output and one input aggregate productivity decompositions can be applied. It turns out that multilateral index number theory is useful in performing the aggregation of many outputs (inputs) into a single output (input).
Author: Gian Luca Clementi Publisher: ISBN: Category : Languages : en Pages : 0
Book Description
How important are firm entry and exit in shaping aggregate dynamics? We address this question by characterizing the equilibrium allocation in Hopenhayn (1992)'s model of equilibrium industry dynamics, amended to allow for investment in physical capital and aggregate fluctuations. We find that entry and exit propagate the effects of aggregate shocks. In turn, this results in greater persistence and unconditional variation of aggregate time-series. In the aftermath of a positive productivity shock, the number of entrants increases. The new firms are smaller and less productive than the incumbents, as in the data. As the common productivity component reverts to its unconditional mean, the new entrants that survive become progressively more productive, keeping aggregate efficiency higher than in a scenario without entry or exit. We also find that both the mean and variance of the cross-sectional distribution of firm-level productivity are counter-cyclical, in spite of the assumption that innovations to firm-level productivity are i.i.d. and orthogonal to aggregate shocks. This happens because of selection: the idiosyncratic productivity of the marginal entrant is lower in expansion than during recessions. Since idiosyncratic productivity is mean-reverting, mean and variance of the distribution of productivity growth are pro-cyclical.
Author: Rory Mullen Publisher: ISBN: Category : Languages : en Pages : 121
Book Description
In chapter one I study pairwise covariances of firm-level productivity, sales, and profit growth rates for public firms in the United States. The data suggest that pairwise covariances of firm growth rates drive the variance of aggregate growth rates in all three variables. High-productivity firms contribute most to aggregate variance in absolute terms, but least per dollar of market value-which may explain why investors demand lower returns from high-productivity firms. A tractable DSGE model helps explain the evidence on firm-level covariance endogenously. In the model, a firm's expected excess stock returns increase as the firm's productivity covaries more with aggregate productivity, relative to the firm's market value. In chapter two, coauthored with Daisoon Kim, we ask where fluctuations in aggregate productivity come from, and what role markups and scale economies play in transmitting fluctuations in firm productivity to aggregate productivity. We develop an empirical framework that decomposes TFP into industry, peer, firm, and entry-exit components. We aggregate these components using a new approximate expression for aggregate TFP that lets us investigate explicitly the role of markups and scale economies in transmitting firm TFP innovations to aggregate TFP. In an application using data on public firms, we find that innovations to the firm-specific component of firm TFP drive most fluctuations in firm TFP, while innovations to the industry component drive most fluctuations in aggregate TFP. Innovations to the peer component appear to play a modest role.
Author: Germán Gutiérrez Publisher: International Monetary Fund ISBN: 1513512943 Category : Business & Economics Languages : en Pages : 43
Book Description
We combine a structural model with cross-sectional micro data to identify the causes and consequences of rising concentration in the US economy. Using asset prices and industry data, we estimate realized and anticipated shocks that drive entry and concentration. We validate our approach by showing that the model-implied entry shocks correlate with independently constructed measures of entry regulations and M&As. We conclude that entry costs have risen in the U.S. over the past 20 years and have depressed capital and consumption by about seven percent.
Author: Michele Cincera Publisher: ISBN: Category : European Economic Community countries Languages : en Pages : 140
Book Description
Recoge: 1. Introduction - 2. Entry, exit, economic performance and the degree of economic and business regulation: a review of the literature - 3. Data and descriptive statistics - 4. Econometric framework - 5. Empirical findings - 6. Summary and conclusions.
Author: Yaohua Lian Publisher: Open Dissertation Press ISBN: 9781361423158 Category : Languages : en Pages :
Book Description
This dissertation, "Firm Entry and Exit Patterns in Chinese Economy" by Yaohua, Lian, 連瑤華, was obtained from The University of Hong Kong (Pokfulam, Hong Kong) and is being sold pursuant to Creative Commons: Attribution 3.0 Hong Kong License. The content of this dissertation has not been altered in any way. We have altered the formatting in order to facilitate the ease of printing and reading of the dissertation. All rights not granted by the above license are retained by the author. Abstract: Abstract of the thesis entitled Firm Entry and Exit Patterns in Chinese Economy Submitted by Yaohua Lian for the degree of Master of Philosophy at The University of Hong Kong in August 2007 With the gradual reform of the Chinese economy from a planned economy to a market economy, the market structure has experienced significant transformation. In this process, the market has witnessed large amount of firm entry and exit, which is an important indication of the soundness and healthiness of the whole market operation according to classic economic theories. Although there are a lot of studies on firm entry and exit in western countries over a long period of time, the study on the Chinese economy is nearly blank. We believe that by studying on the basic patterns of firm entry and exit, we could have a better understanding on the economic transformation and operation in China and also make contribution to this field of study. In our study, we use the Annual Survey of Industrial Firms dataset which covers more than 150 thousand manufacturing enterprises annually in China from 1998-2003. Based on the theories developed by Jovanovic (1982) and Hopenhayn (1992) and some empirical methodologies used in previous studies, we examine the firm entry and exit patterns from different aspects. In the summary statistics part, we give out the basic aggregate rates as well as the industry output volatility rates to study sunk entry cost of different industries. Following a study of the ownership effects on productivity, we also check the productivity differences between entrants and incumbents as well as between surviving firms and exiting firms. In China, we could not see significant productivity differences in these two firm groups. Lastly, a study on the firm failure and growth is conducted. We find that firm size and age have significant influence on firm failure and growth. But opposite to the existing theories, in China, older and larger enterprises tend to grow more quickly. We have also added in some special factors relative to China such as ownership types and regional differences into our models to reflect the unique economic features of China as an improvement of the basic methodology developed in the literature. These two factors turned out to have significant effects on the firm entry and exit patterns. We hope that by conducting this study, we could add knowledge to the firm entry and exit patterns in China and in turn, to assess the Chinese economy from another point of view. (381 words) DOI: 10.5353/th_b3900588 Subjects: Business enterprises - China Business failures - China Success in business - China
Author: Jose Asturias
Author: Jose Asturias
Author: W. Erwin Diewert
Author: Gian Luca Clementi
Author: 
Author: Alain Gabler
Author: Rory Mullen
Author: Li Yu
Author: Germán Gutiérrez
Author: Michele Cincera
Author: Yaohua Lian