Older and slower: The startup deficit's lasting effects on aggregate productivity growth


Journal Article

© 2017 Elsevier B.V. Declining firm entry and the aging incumbent firms have meaningful implications for sluggish U.S. aggregate productivity growth. We provide a framework to characterize the contributions to industry productivity growth across the firm age distribution then apply it to firm-level Census data. Several findings emerge: the relationship between firm age and productivity growth is downward sloping and convex; the magnitudes are substantial but fade quickly; selection and reallocation predominantly drive higher productivity growth of young firms. Our results suggest a cumulative drag on aggregate productivity of 3.1% since 1980 and are expanded upon with an IV strategy and standard model of firm dynamics.

Full Text

Duke Authors

Cited Authors

  • Alon, T; Berger, D; Dent, R; Pugsley, B

Published Date

  • January 1, 2018

Published In

Volume / Issue

  • 93 /

Start / End Page

  • 68 - 85

International Standard Serial Number (ISSN)

  • 0304-3932

Digital Object Identifier (DOI)

  • 10.1016/j.jmoneco.2017.10.004

Citation Source

  • Scopus