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The Size and Life-cycle Growth of Plants: The Role of Productivity, Demand and Wedges

Author

Listed:
  • Marcela Eslava
  • John C. Haltiwanger
Abstract
We develop a framework that uses price and quantity information on both establishments' outputs and inputs to assess the roles, on establishment dynamics and welfare, of technical efficiency, input prices, demand/quality, idiosyncratic markups, and residual wedges. Our strategy nests previous approaches limited by data availability. In our application, demand/quality is found to dominate the cross sectional variability of sales and sales growth, while quality-adjusted input prices and residual wedges play dampening roles, especially at birth. Markups play only a modest role for cross-sectional variability of sales and sales growth but are important in explaining welfare losses from revenue productivity dispersion.

Suggested Citation

  • Marcela Eslava & John C. Haltiwanger, 2020. "The Size and Life-cycle Growth of Plants: The Role of Productivity, Demand and Wedges," NBER Working Papers 27184, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:27184
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    References listed on IDEAS

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    Cited by:

    1. Botero García, Jesús Alonso & Hurtado, Alvaro & Montañez Herrera, Diego Fernando, 2021. "The productivity of the agricultural sector and its effects on economic growth: a CGE analysis," Conference papers 333318, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    2. De Loecker, Jan, 2021. "Comment on (Un)pleasant ... by Bond et al (2020)," Journal of Monetary Economics, Elsevier, vol. 121(C), pages 15-18.
    3. Eero Mäkynen & Oskari Vähämaa, 2021. "Uncertainty, Misallocation and the Life-cycle Growth of Firms," Discussion Papers 146, Aboa Centre for Economics.
    4. Joern Kleinert, 2021. "Organizational capital, technological choice, and firm productivity," Graz Economics Papers 2021-03, University of Graz, Department of Economics.

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    More about this item

    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • L24 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Contracting Out; Joint Ventures
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence

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