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- Title
Firm dynamics and productivity growth: a comparison of the retail trade and manufacturing sectors.
- Authors
Baldwin, John R.; Gu, Wulong
- Abstract
This article examines how the reallocation of market shares differs in the retail trade and manufacturing sectors and what it reveals about the nature of competition in the two sectors. It compares and contrasts the amount and type of firm dynamics and examines its contribution to aggregate productivity growth in those two sectors. The potential competitive pressures acting on these two very different industries were very similar in that about the same proportion of firms entered and exited both industries. The survival processes associated with exit were similar. There were similar differences in productivity between entrants and the exits that they drove out. While the potential for turnover was the same, its realization was not. Retail entrants bought a different option when they experimented with entry that suggests different entry costs. They started at a larger relative size upon entry. The differences that occurred in relative entry size gave retail entrants a greater proportional share of output and inputs and led the turnover process to make a greater contribution to aggregate productivity growth.
- Subjects
INDUSTRIAL productivity; RETAIL industry; MANUFACTURED products; MARKET share; ECONOMIC competition; MARKET exit; MARKET entry; BUSINESS turnover
- Publication
Industrial & Corporate Change, 2011, Vol 20, Issue 2, p367
- ISSN
0960-6491
- Publication type
Article
- DOI
10.1093/icc/dtq064