Productivity growth is the main driver of long-run increases in per capita income and welfare. Understanding the sources of productivity growth and the effect on policy on growth may provide for improvements in growth-oriented policy. Recent research has suggested that multiple paths to aggregate productivity must be distinguished: improvements at the firm-level, improvements in resource allocation across firms that differ in productivity, and entry and exit of firms. This project aims at providing a method to measure these different components in a harmonized manner across countries, and in finding methods to analyze these data in order to identify the effects on productivity growth of cross-country differences in policy.
Haltiwanger, J.; Bartelsman, E. Developing and Analyzing Firm-Level Indicators on Productivity and Reallocation (IGC Policy Brief). International Growth Centre (IGC), London, UK (2011) 4 pp.