International Productivity Comparisons Built from the Firm Level

• Published in: The Journal of economic perspectives Vol. 15; no. 3; pp. 151 - 172
• Main Authors: Baily, Martin Neil, Solow, Robert M.
• Format: Journal Article
• Language: English
• Published: Nashville American Economic Association 01-07-2001
• Subjects: Aggregate analysis; Comparative studies; Competition; Economic performance; Economic theory; Employment; Food processing industries; Foreign exchange rates; GDP; Gross Domestic Product; Industrial market; Industrial productivity; Labor productivity; Macroeconomics; Manufacturing; Microeconomics; Prices; Productivity; Productivity measurement; Purchasing power parity; Retail industries; Retail stores; Service industries; Service industry; Steel industry
• ISSN: 0895-3309; 1944-7965
• DOI: 10.1257/jep.15.3.151

International productivity comparisons can be built up with micro and macro data. Studies of firms or groups of firms producing similar outputs reveal the deeper causes of differences in productivity across countries. The studies find that such differences often depend on patterns of organization within firms, the motivations of managers and the like. The intensity of domestic and international competition can have a large impact on productivity. The case of retailing illustrates the importance of industry evolution. High productivity retailing formats drive out traditional retailers, unless restrained by land-use restrictions or regulations.