When firms and industries matter: understanding the sources of productivity growth

Ulf Lewrick, Lukas Mohler and Rolf Weder

No 469, BIS Working Papers from Bank for International Settlements

Abstract: This paper presents a framework to assess the relative importance of three key sources of productivity growth that research on international trade focuses on: (i) inter-industry specialisation; (ii) intra-industry reallocation of resources across heterogeneous firms, including firm entry and exit; and (iii) technological progress. Detailed data on Swiss manufacturing firms illustrate how the framework can be empirically applied. Based on this example, we find that intra-industry reallocations are the most important source of growth in aggregate total factor productivity, reflecting in particular the productivity growth of large, incumbent firms and the entry of new firms. That said, inter-industry specialisation and general technological progress remain important supplementary sources of growth in Swiss manufacturing.

Keywords: Growth; total factor productivity; inter-industry trade; intra-industry trade (search for similar items in EconPapers)
Pages: 30 pages
Date: 2014-10
New Economics Papers: this item is included in nep-bec, nep-cse, nep-eff, nep-int and nep-sbm
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Citations: View citations in EconPapers (9)

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Persistent link: https://EconPapers.repec.org/RePEc:bis:biswps:469

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