Working Paper BETA #2019-45

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Title : Productivity Dynamics in French Woodworking Industries

Author(s) : Enrico De Monte, Anne-Laure Levet

Abstract : This paper investigates productivity dynamics of firms active in French woodworking 4- digit industries. For this purpose we analyze firm-level data from the two fiscal data bases FICUS (1994 - 2008) and FARE (2008 - 2016). Based on firm-level productivity measures, recovered from the estimation of a value-added Cobb-Douglas production function, we mainly study the industries’ aggregate productivity growth related to entry and exit. Also, by constructing a transition matrix we investigate firms’ probability to survive, enter or exit given a specific ranking of their productivity. We find that all industries increased considerably their aggregate productivity between 1994 and 2016, where the by far largest part of this positive development is contributed by survivors productivity improvement. Entrants contribute negatively to aggregate productivity growths while the contribution of exitors varies in sign for different industries. Also, we find that firms reveal high persistence in their productivity ranking over time and that entry and exit is more probable for low productive and small firms.

Key-words : production function estimation, aggregate productivity, productivity decomposition, technological change, firm entry and exit.

JEL Classification : C13; C14; D24; D30; O47