This paper explores what we know and bow we think about firm performance, firm and industry evolution, and economic growth. It reports empirical findings from a new literature that focuses explicitly on individual business units. In contrast to traditional empirical studies of competition and economic growth that examine aggregate economic variables such as industry or regional productivity, this new work concentrates on differences in the behavior of firms and their business units. The results emerging from these analyses confirm the importance of microeconomic approaches to economic research and place the firm at the center of economic growth. ' A related factor ii that molt economists simply did not think that the biases inherent in misspecified industry-and economy-wide modelj were very large. Of count, in the absence of access to the microdata, there was simply no other alternative than to use the aggregative data. ' See McGuckin and Pascoe (1988) for a description of the LRD. Research with the LRD is described in McGuckin (1995), McGuckin and Reinek (1993) and the annual reports of the CES.
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