The productivity estimates are used to examine the relationship between competition and productivity growth. While existing studies estimate measures of central tendency, we model plants' conditional productivity distribution using regression quantiles. The effect of competition on productivity growth varies widely based on plants' location in the conditional productivity growth distribution. We show that, after controlling for unobserved plant and industry heterogeneity, at upper ends of the productivity growth distribution a 'Schumpeterian' effect of higher competition lowering growth dominates. For firms at the lower tails an 'escape competition' effect of productivity improvements prevails. We also show that, within an industry the relationship between competition and productivity growth is correlated with existing levels of competition. The diversity in the competition-productivity relationship at the industry level suggests that industry orientation is fundamental in defining competition policy targets. While removing entry barriers and tightening antitrust/collusion policy could increase aggregate growth in some industries, higher competition need not necessarily favor growth of all firms in other industries.Our analysis of the competition-productivity relationship at the two-digit industry level reveals significant diversity across sectors. The results show ... At the median, competition does not have a statistically significant influence on productivity.
|Title||:||Essays on Plant-level Productivity, Market Structure, and Enterprise Growth|
|Publisher||:||ProQuest - 2009|