TY - JOUR AU - Foster,Lucia AU - Haltiwanger,John AU - Krizan,C.J. TI - Aggregate Productivity Growth: Lessons from Microeconomic Evidence JF - National Bureau of Economic Research Working Paper Series VL - No. 6803 PY - 1998 Y2 - November 1998 UR - http://www.nber.org/papers/w6803 L1 - http://www.nber.org/papers/w6803.pdf N1 - Author contact info: Lucia Foster Center for Economic Studies Census Bureau Room 211/WP11 Washington, DC 20233-6300 Tel: 301-763-6444 Fax: Senior Economist E-Mail: lucia.s.foster@census.gov John C. Haltiwanger Department of Economics University of Maryland College Park, MD 20742 Tel: 301/405-3504 Fax: 301/405-3542 E-Mail: haltiwan@econ.umd.edu C. J. Krizan Center for Economic Studies U.S. Census Bureau 4600 Silver Hill Road Washington, DC 20233 E-Mail: Cornell.J.Krizan@census.gov M1 - published as Lucia Foster, John C. Haltiwanger, C. J. Krizan. "Aggregate Productivity Growth. Lessons from Microeconomic Evidence," in Charles R. Hulten, Edwin R. Dean and Michael J. Harper, editors, "New Developments in Productivity Analysis" University of Chicago Press (2001) AB - In this paper, we exploit establishment-level data to examine the relationship between microeconomic productivity dynamics and aggregate productivity growth. After synthesizing the evidence from recent studies, we conduct our own analysis using establishment-level data for U.S. manufacturing establishments as well for selected service industries. The use of longitudinal micro data on service sector establishments is one of the novel features of our analysis. Our main findings are summarized as follows: (i) the contribution of reallocation of outputs and inputs from less productive to more productive establishments plays a significant role in accounting for aggregate productivity growth; (ii) for the selected service industries considered, the contribution of net entry (more productive entering establishments displacing less productive exiting establishments) is dominant; (iii) the contribution of net entry to aggregate productivity growth is disproportionate and is increasing in the horizon over which the changes are measured since longer horizon yields greater differentials from selection and learning effects; (iv) the contribution of reallocation to aggregate productivity growth varies over time (e.g. is cyclically sensitive) and industries and is somewhat sensitive to subtle differences in measurement and decomposition methodologies. ER -