Productivity Revisited: Shifting Paradigms in Analysis and Policy

High-Growth Firms: Facts, Fiction, and Policy Options for Emerging Economies

“…The evidence in this book shows that policies that seek out potential HGFs based on outward characteristics or target some desired share of HGFs are likely to be misguided. This is because the link between productivity and high growth is often weak since firms may grow for a variety of reasons, with the growth driven by high efficiency but also demand shocks, uncompetitive markets, or political connections (the second volume of the World Bank Productivity Project, Cusolito and Maloney [2018], presents the latest advances in productivity research). For example, data from Côte d'Ivoire indicate that there is little overlap between a set of "efficient" HGFs (those firms that would attain HGF status if resources across the economy were allocated according to firms' productivity) and the observed HGFs.…”

Productivity Growth in Romania: A Firm-Level Analysis

“…At the same time, dispersion in terms of total factor productivity -adjusted and non-adjusted TFPR -has been increasing over time. This can be explained by several factors, including not only policy distortions, but also differences in technology, quality, markups, adjustment costs to capital coupled with volatility in sales, or even different levels of experimentation (Cusolito and Maloney, 2018). Irrespective of the underlying drivers, the data show unequivocal evidence that firms are becoming increasingly heterogenous in terms of total factor productivity, which reinforces the need to go beyond the average firm and explore firm heterogeneity.…”

“…In principle, productivity growth can be decomposed into three components: within, between and selection (entry/exit). As highlighted in Cusolito and Maloney (2018), the first component reflects the ability of incumbent firms to become more productive and is related to the upgrading of firms' internal capabilities (by innovating, adopting new technologies, and applying best managerial practices). The "between" component is associated with the reallocation of factors of production and economic activity towards more efficient firms.…”

“…innovation, product quality, etc.). In this sense, the TFPR adj is not a perfect measure of the true technical efficiency, but just a proxy of it that accounts for market share and the effect 7 See Cusolito and Maloney (2018) for a specific discussion on how the traditional TFPR measure conflates both demand and supply factors, and how ignoring these can bias the analysis of productivity growth drivers. 8 In this case, the TFP adjusted measure is partially free of price effects because it might still carry quality/demand effects.…”

Measurement and Determinants of Multi‐factor Productivity: A Survey of Literature

“…Considerable advancement in TFP measurement has taken place since the seminal work of Jorgenson and Griliches (1967). Surprisingly, the TFP measurement methods and estimators developed over time are silent about market power, scale economies, and the demand side of the market (Cusolito and Maloney, 2018). To find out the best measure of MFP, Bournakis and Mallick (2018) consider five methodologies of MFP measurement, namely Superlative index numbers, System-GMM, Olley and Pakes (1996), Levisohn and Petrin (2003), and Ackerberg et al (2015).…”