Book contents
- Frontmatter
- Contents
- preface
- Acknowledgements
- 1 The dynamics of competition
- 2 Greenfield entry and closedown exit
- 3 Entry, exit, and the merger process
- 4 The rise and fall of incumbents
- 5 Patterns of large- and small-firm mobility
- 6 Plant turnover in Canada and the United States
- 7 Measures of market structure and the intensity of competition
- 8 The relationship between mobility and concentration
- 9 Turnover and productivity growth
- 10 Merger success
- 11 Turnover in domestic and foreign enterprises
- 12 Industry efficiency and firm turnover in the Canadian manufacturing sector
- 13 Firm turnover and profitability
- 14 Modelling entry
- 15 Conclusion
- Appendix A Measuring firm turnover – methodology
- Appendix B Definition of concentration and mobility measures
- Notes
- References
- Author index
- Subject index
9 - Turnover and productivity growth
Published online by Cambridge University Press: 30 March 2010
- Frontmatter
- Contents
- preface
- Acknowledgements
- 1 The dynamics of competition
- 2 Greenfield entry and closedown exit
- 3 Entry, exit, and the merger process
- 4 The rise and fall of incumbents
- 5 Patterns of large- and small-firm mobility
- 6 Plant turnover in Canada and the United States
- 7 Measures of market structure and the intensity of competition
- 8 The relationship between mobility and concentration
- 9 Turnover and productivity growth
- 10 Merger success
- 11 Turnover in domestic and foreign enterprises
- 12 Industry efficiency and firm turnover in the Canadian manufacturing sector
- 13 Firm turnover and profitability
- 14 Modelling entry
- 15 Conclusion
- Appendix A Measuring firm turnover – methodology
- Appendix B Definition of concentration and mobility measures
- Notes
- References
- Author index
- Subject index
Summary
Like human beings firms are constantly being born that cannot live. Others may meet what is akin, in the case of man, to death from accident or illness. Still others die a “natural” death, as men die of old age. And the “natural” cause, in the case of firms, is precisely their inability to keep up the pace in innovation which they themselves had been instrumental in setting in the time of their vigour.
Joseph Schumpeter (1939: 69)Introduction
Productivity growth and technical change have often been described as disembodied – a type of manna from heaven. Studies of productivity in the Solow growth-model tradition tend to ignore the contribution that the worldly process of competition makes to growth. This is not the picture of Schumpeter's world where innovation and turnover are linked. While some progress has been made by writers like Nelson and Winter (1982) and Scherer (1983) in dispelling the belief that technical change is bestowed in some ephemeral form, much remains to be done. When technical progress is described in a more earthly form, the narration proceeds in terms of such concrete phenomena as the aggregate labour and machines employed in an industry. While the endogeneity of innovation and technical change was stressed by Schumpeter (1942) and more recently by Rohmer (1986), improvements in productivity are rarely related, at least in empirical studies, to the dynamics of firm turnover.
Industrial economics has taken several tentative steps to measure certain aspects of this relationship; but none fits the various pieces of the puzzle together.
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- The Dynamics of Industrial CompetitionA North American Perspective, pp. 208 - 238Publisher: Cambridge University PressPrint publication year: 1995
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