Aggregate Productivity Growth and Firm Dynamics in Korean Manufacturing 2007-2017

2020 ◽  
Author(s):  
Kyoo il Kim ◽  
Jin Ho Park
2019 ◽  
Vol 11 (4) ◽  
pp. 235-270 ◽  
Author(s):  
Toshihiko Mukoyama ◽  
Sophie Osotimehin

We study how factors that hinder the reallocation of inputs across firms influence aggregate productivity growth. We extend Hopenhayn and Rogerson’s (1993) firm-dynamics model to allow for endogenous innovation. We evaluate the effects of firing taxes on reallocation, innovation, and productivity growth. We find firing taxes can have opposite effects on entrants’ innovation and incumbents’ innovation, and the overall outcome depends on the relative strengths of these forces. In the entrant-driven growth calibration, firing taxes reduce aggregate productivity growth, whereas aggregate productivity growth increases in the incumbent-driven growth calibration. (JEL D24, E23, E24, J23, J24, J62, K31, O31, O47)


2019 ◽  
Vol 11 (2) ◽  
pp. 275-309 ◽  
Author(s):  
Andrea Caggese

I provide new empirical evidence on the negative relationship between financial frictions and productivity growth over a firm’s life cycle. I show that a model of firm dynamics with incremental innovation cannot explain this evidence. However, further including radical innovation, which is very risky but potentially very productive, allows for the joint replication of several stylized facts about the dynamics of young and old firms and the differences in productivity growth in industries with different degrees of financing frictions. These frictions matter because they act as a barrier to entry that reduces competition and the risk-taking of young firms. (JEL D22, D24, D25, G32, L25, L60, O31)


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