Entry, Exit, and Aggregate Productivity Growth: Micro Evidence on Korean Manufacturing

98663 Document complet disponible sur OLIS dans son format d'origine Complete document available on OLIS in its original format ECO/WKP(2000)45 2 ABSTRACT/RÉSUMÉ Using plant level panel data on Korean manufacturing during the 1990-98 period, this study tries to assess the role of entry and exit in enhancing aggregate productivity, both qualitatively and quantitatively. The main findings of this study are summarised as follows. First, plant entry and exit rates in Korean manufacturing seem quite high: they are higher than in both the United States and several developing countries for which comparable studies exist. Second, in line with existing studies on other countries, plant turnover reflects underlying productivity differentials in Korean manufacturing, with the " shadow of death " effect as well as selection and learning effects all present. Third, plant entry and exit account for as much as 45 and 65 per cent in manufacturing productivity growth during cyclical upturn and downturn, respectively. This study also shows that plant birth and death are mainly a process of resource reallocation from plants with relatively low and declining productivity to a group of heterogeneous plants, some of which have the potential to become highly efficient in future. The most obvious lesson from this study is that it is important to establish a policy or institutional environment where efficient businesses can succeed and inefficient businesses fail. non performantes soient liquidées.