Abstract
AbstractStructural change is an important driver of productivity growth at the aggregate level. While previous productivity decompositions account for the contributions of market entry and exit, they overlook continuing firms that switch from one industry to another. We develop an improved productivity decomposition that accounts for both intra-industry and inter-industry switching, is applicable to both static and inter-temporal settings, and ensures consistent aggregation of firm-level productivity to the industry level. The proposed decomposition is applied to Finland’s information and communication technology (ICT) industry in the first two decades of the 21st century. This industry experienced major structural changes due to the rapid downfall of Nokia, the world’s largest mobile phone manufacturer at the beginning of our study period. Our results reveal that the sharp decline of labor productivity was associated with structural changes, whereas the surviving firms that continued in the same industry managed to improve their productivity. Our results indicate that industry switching can dampen or enhance the productivity impacts of structural change, especially during times of crisis and recession.
Publisher
Springer Science and Business Media LLC
Subject
Economics and Econometrics,Social Sciences (miscellaneous),Business and International Management
Reference28 articles.
1. Abbring JH, Campbell JR, Tilly J, Yang N (2018) Very Simple Markov‐Perfect Industry Dynamics: Theory. Econometrica 86(2):721–735
2. Ali-Yrkkö J, Cherif R, Hasanov F, Kuosmanen N, Pajarinen M (2021) Knowledge Spillovers From Superstar Tech-Firms: The Case of Nokia. IMF Working Pap 21:258
3. Baily MN, Hulten C, Campbell D (1992) Productivity dynamics in manufacturing plants. Brookings Pap Econ Act: Microecon 2:187–267
4. Eurostat (2008) NACE Rev. 2. Statistical classification of economic activities in the European Community. Eurostat Methodologies and Working papers. European Commission, Luxembourg
5. Bansal P, Mehra A, Kumar S (2022) Dynamic Metafrontier Malmquist–Luenberger Productivity Index in Network DEA: an application to banking data. Comput Econ 59:297–324
Cited by
2 articles.
订阅此论文施引文献
订阅此论文施引文献,注册后可以免费订阅5篇论文的施引文献,订阅后可以查看论文全部施引文献