Firm Dynamics in Developing Countries=1Based on a joint work with Harun Alp

95 Pages·2015·1.12 MB·English

FirmDynamicsinDevelopingCountries1
UfukAkcigit
UniversityofChicago&NBER
ConferenceonEconomicGrowth-July10,2015
1BasedonajointworkwithHarunAlp(UPenn)andMichaelPeters(Yale)
UfukAkcigit(UofChicagoandNBER) FirmDynamicsinDevelopingCountries July10,2015 1
Going from micro-to-macro is crucial.
The back-and-forth dialogue between data and
theory is important.
Background
Understanding the growth process requires a
good understanding of micro players (firms &
entrepreneurs) of the macroeconomy.
UfukAkcigit(UofChicagoandNBER) FirmDynamicsinDevelopingCountries July10,2015 2
The back-and-forth dialogue between data and
theory is important.
Background
Understanding the growth process requires a
good understanding of micro players (firms &
entrepreneurs) of the macroeconomy.
Going from micro-to-macro is crucial.
UfukAkcigit(UofChicagoandNBER) FirmDynamicsinDevelopingCountries July10,2015 2
Background
Understanding the growth process requires a
good understanding of micro players (firms &
entrepreneurs) of the macroeconomy.
Going from micro-to-macro is crucial.
The back-and-forth dialogue between data and
theory is important.
UfukAkcigit(UofChicagoandNBER) FirmDynamicsinDevelopingCountries July10,2015 2
What is Our Research Approach?
Start with empirical regularities in the micro data.
Motivated by those regularities, construct a
general equilibrium theory of firm dynamics and
aggregate growth.
Estimate the structural parameters of the model
using micro-level data.
Conduct counterfactual experiments.
UfukAkcigit(UofChicagoandNBER) FirmDynamicsinDevelopingCountries July10,2015 3
Motivation
Recent literature: Firm dynamics in poor countries
show striking differences to those of rich countries
UfukAkcigit(UofChicagoandNBER) FirmDynamicsinDevelopingCountries July10,2015 4
Hsieh and Klenow (2014)
Figure(cid:2)1:(cid:2)(cid:2)Plant(cid:2)Employment(cid:2)by(cid:2)Age(cid:2)in(cid:2)the(cid:2)Cross(cid:3)Section(cid:2)
(cid:2)
8
=1) 4 US
5
<
e
g Mexico
A
nt ( 2
e
m
y
o
pl
m
E 1 India
1/2
<5 5-9 10-14 15-19 20-24 25-29 30-34 35-39 >=40
Age
Sources:(cid:2)1994(cid:3)1995(cid:2)ASI(cid:3)NSS(cid:2)(India),(cid:2)2003(cid:2)Economic(cid:2)Census(cid:2)(Mexico),(cid:2)and(cid:2)2002(cid:2)Manufacturing(cid:2)Census(cid:2)(U.S.).
UfukAkcigit(UofChicagoandNBER) FirmDynamicsinDevelopingCountries July10,2015 5
Hsieh and Klenow (2014)
Figure(cid:2)1:(cid:2)(cid:2)Plant(cid:2)Employment(cid:2)by(cid:2)Age(cid:2)in(cid:2)the(cid:2)Cross(cid:3)Section(cid:2)
(cid:2)
8
=1) 4 US
5
<
e
g Mexico
A
nt ( 2
e
m
y
o
pl
m
E 1 India
1/2
<5 5-9 10-14 15-19 20-24 25-29 30-34 35-39 >=40
Age
Sources:(cid:2)1994(cid:3)1995(cid:2)ASI(cid:3)NSS(cid:2)(India),(cid:2)2003(cid:2)Economic(cid:2)Census(cid:2)(Mexico),(cid:2)and(cid:2)2002(cid:2)Manufacturing(cid:2)Census(cid:2)(U.S.).
UfukAkcigit(UofChicagoandNBER) FirmDynamicsinDevelopingCountries July10,2015 5
The expanding firms in India
While the average life-cycle is flat, some Indian
firms manage to grow:
3.5
3
tn2.5
e
m
y
o
lpm 2
E
n
a
e
M1.5
1
Mean
95% Confidence Interval
<5 6-10 11-15 16-20 21-25 26-30 31-35 36-40 40>
Age
UfukAkcigit(UofChicagoandNBER) FirmDynamicsinDevelopingCountries July10,2015 6
ASIvsNSS FamilyFirms
The stagnant firms in India
Extra
... but aggregate importance of tiny producers
stays stubbornly high
1
0.8
stn
e
m
h0.6
silb
a
tsE
fo e0.4
ra
h
S
0.2
India
0
0-5 6-10 11-15 16-20 21-25 26+
Age
UfukAkcigit(UofChicagoandNBER) FirmDynamicsinDevelopingCountries July10,2015 7