raies, asma (2006): The impacts of technological change, industry structure and Plant entry/exit on industry efficiency growth. Published in: The Business Review, Cambridge , Vol. Vol. 6, No. Number 2 (December 2006): pp. 1-12.
Download (189kB) | Preview
In this paper, we provide a theoretical framework combining both the theory of adoption and industry evolution to explore the different sources of industry efficiency growth. The objective is to investigate which of the explanatory variables can explain inefficiency. The theoretical and simulation results of this study show that the inter-firms efficiency variance exerts a substantial impact on industry efficiency. Productivity change within individual plant (via adoption and learning) is a major source of efficiency growth in the industry. Exit usually improves aggregate efficiency as less efficient plants leave industries. The impact of entry is less clear since it depends on the efficiency levels of entrants. Finally, the role of competition in generating economic efficiency is strongly confirmed. Our theoretical findings confirm and extend others in the empirical studies.
|Item Type:||MPRA Paper|
|Original Title:||The impacts of technological change, industry structure and Plant entry/exit on industry efficiency growth|
|Keywords:||Technological Change; Industry Structure; Plant Entry/Exit; industry efficiency growth|
|Subjects:||O - Economic Development, Technological Change, and Growth > O3 - Technological Change; Research and Development; Intellectual Property Rights > O33 - Technological Change: Choices and Consequences; Diffusion Processes
L - Industrial Organization > L2 - Firm Objectives, Organization, and Behavior > L22 - Firm Organization and Market Structure
O - Economic Development, Technological Change, and Growth > O3 - Technological Change; Research and Development; Intellectual Property Rights
|Depositing User:||Mohamed Ben Mimoun|
|Date Deposited:||13. Jul 2008 23:58|
|Last Modified:||19. Feb 2013 07:41|
- Baily, Martin Neil, Eric J. Bartelsman and John Haltiwanger. “Labor Productivity: Structural Change and Cyclical Dynamics,” NBER Working Paper No. 5503, revised 1997.
- Baily, Martin Neil, Charles Hulten and David Campbell. “Productivity Dynamics in manufacturing Plants,” Brookings Papers on Economic Activity: Microeconomics, 1992, 187-249.
- Bartelsman, Eric. J., “Using Microdata for Economic Research and Policy Analysis,” unpublished manuscript, Central Planning Bureau, Netherlands, 1995. Dixit A (1989) “ Entry and Exit Decisions Under Uncertainty”. Journal of Political Economy 97: 620-638.
- Bartelsman, Eric J., and Mark Doms, “Understanding Productivity: Lessons from Longitudinal MicroDatasets,” mimeo, 1997.
- Bartelsman, Eric J., and Phoebus J. Dhrymes. “Productivity Dynamics: U.S. Manufacturing Plants, 1972-86,” Board of Governors of the Federal Reserve Board, Finance and Economics Discussion Series, No. 94-1, 1994.
- Aw, Bee Yan, Xiaomin Chen, and Mark J. Roberts. “Firm-Level Evidence on Productivity Differentials, Turnovers, and Exports in Taiwanese Manufacturing,” NBER Working Paper No. 6235, 1997.
- Ericson, R and A.Pakes (1995) “Preemption and Rent Equalization in the Adoption of new Technology” Review of Economic Studies, 62, 53-82.
- Foster L, Haltiwanger J.and Krizan C (2000) “Aggregate productivity growth: lesson from microeconomic evidence” Department of Economics, University of Maryland and Center for Economic Studies, US Bureau of the Cencus, Washington, DC.
- Fudenberg, D, Tirole, J (1985) “ Preemption and rent equalization in the adoption of new technology”. Review of economic Studies, 383-401.
- Hopenhayn H (1992a) “Entry, Exit and Firm Dynamics in Long Run Equilibrium” Econometrica 60: 1127-1150
- Jensen, R, (1992) “ Innovation adoption and welfare under uncertainty”. Journal of industrial economics, 173-180.
- Jovanovic B (1982) “ Selection and Evolution of Industry”. Econometrica 50: 649-760
- Jovanovic B , Lach S (1989) “ Entry, Exit, and Diffusion with Learning by doing”. American Economic Review 79: 690-699 - Klepper S, Graddy E (1990) “ The Evolution of New Industries and the Determinants of Market Structure”. Rand Journal 21: 27-44
- Lambson VE (1991) “ Industry Evolution with Sunk Costs and Uncertain Market Conditions”.International Journal of Industrial Organization 9:171-196.