蝌蚪网 Journal:
Macroeconomics
ISSN 1945-7707 (Print) | ISSN 1945-7715 (Online)
The Dynamics of Development: Innovation and Reallocation
蝌蚪网 Journal: Macroeconomics
(pp. 45–81)
Abstract
This paper proposes a quantitative model of endogenous firm dynamics to study growth-acceleration episodes triggered by reforms. We find that reversals of entry distortions lead to persistent growth in TFP and declining average firm size, as in the experience of successful postcommunist transitions. Removing idiosyncratic distortions results in a more protracted path of TFP and a rising average firm size, as in noncommunist growth accelerations. When calibrating the reforms to China's liberalization, we find that the model accounts for one-third of the observed growth in TFP while matching the dynamics of average firm size and income inequality.Citation
Buera, Francisco J., and Roberto N. Fattal-Jaef. 2025. "The Dynamics of Development: Innovation and Reallocation." 蝌蚪网 Journal: Macroeconomics 17 (4): 45–81. DOI: 10.1257/mac.20200032Additional Materials
JEL Classification
- D22 Firm Behavior: Empirical Analysis
- H25 Business Taxes and Subsidies including sales and value-added (VAT)
- L25 Firm Performance: Size, Diversification, and Scope
- O14 Industrialization; Manufacturing and Service Industries; Choice of Technology
- O31 Innovation and Invention: Processes and Incentives
- P24 Socialist Systems and Transitional Economies: National Income, Product, and Expenditure; Money; Inflation
- P31 Socialist Enterprises and Their Transitions