Creative Destruction and Productivity Growth in an Emerging Economy Evidence from Slovenian Manufacturing
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Date
2003-12
Authors
De Loecker, Jan
Konings, Jozef
Journal Title
Journal ISSN
Volume Title
Publisher
LICOS Centre for Transition Economics
Abstract
In most transition countries the aggregate level evidence suggests that most
industries are just destroying jobs, due to the legacy of communism where overmanning
levels of employment were the norm. This paper sheds light on whether the
transition process in Slovenian manufacturing has been one of just destruction or in
contrast one of creative destruction. To this end we start by documenting gross job
flows for the Slovenian manufacturing sector between 1994 and 2000. In contrast to
slowly reforming transition economies where the transition process in manufacturing
is characterized by little job creation and high job destruction, we find for Slovenian
manufacturing a process of both substantial job creation and destruction. This
indicates that restructuring in Slovenia involves a substantial reallocation process. We
find higher job reallocation in private and small firms where the contribution of entry
and exit to the job reallocation process is higher.
We further use the Olley-Pakes methodology to estimate total factor productivity
(TFP) and show that TFP has increased in most sectors. We find that this is mainly
driven by existing firms becoming more efficient and by the net entry process, i.e.
more efficient firms enter the industry.
Description
Keywords
creative destruction, total factor productivity, reallocation, Research Subject Categories::SOCIAL SCIENCES::Business and economics
Citation
De Loecker Jan, Konings Jozef, 2003, LICOS Centre for Transition Economics; Creative Destruction and Productivity Growth in an Emerging Economy Evidence from Slovenian Manufacturing. http://nur.nu.edu.kz/handle/123456789/1892