From Firm Productivity Dynamics to Aggregate Efficiency

Lopez-Martin, Bernabe

Published by Oxford University Press on behalf of the World Bank

关键词: FIRM PRODUCTIVITY;    PRODUCTIVITY;    LABOR MARKET;    AGGREGATE EFFICIENCY;    TOTAL FACTOR PRODUCTIVITY;   

DOI  :  10.1093/wber/lhw021
RP-ID  :  140513

学科分类：社会科学、人文和艺术（综合）

来源: World Bank Open Knowledge Repository

【 摘 要 】

The author constructs a quantitativeframework to evaluate how financial constraints can reduceproductivity growth at the firm level and result in loweraggregate productivity. The author considers a model wherefirms are able to invest in innovation in order to increasetheir productivity, or knowledge capital. This investment isa costly and uncertain enterprise. As the capacity to obtainexternal funds is diminished, resources allocated to thiseffort will be reduced due to different mechanisms at work.First, the return of this investment in the case of successmay be diminished by the inability to quickly increaseproduction capacity if the credit necessary to do so isscarce (i.e., if entrepreneurs cannot rent the optimal levelof physical capital). Second, financial constraints reduceprofits obtained by entrepreneurs and therefore the amountof assets they are able to accumulate in every period.Finally, financially underdeveloped economies will becharacterized by a lower average ability of entrepreneurs.This is due to the lower equilibrium wage in the economy,which results in a larger mass of individuals opting to setup firms. In the margin, these individuals tend to havelower ability to manage a firm and relatively low prospectsof generating firm productivity growth through innovation.