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The importance of frontier firms in total factor productivity in New Zealand, 2001-2016.

Harris, R. I. D. (2020) 'The importance of frontier firms in total factor productivity in New Zealand, 2001-2016.', New Zealand economic papers., 54 (3). 285-311 .

Abstract

Using firm-level panel data and estimating production functions for 37 industries, covering the 2001–16 period, this paper finds little evidence of major changes in frontier TFP over 2001–16, and limited evidence of catching-up; that is, it seems very likely that New Zealand firms at the national frontier are not keeping pace with global frontier firms. The most important conclusion from this study is that while there is some evidence of a failure of productivity-enhancing technologies to diffuse from firms operating at the national productivity frontier, the major problem is failure of productivity-enhancing technologies to diffuse from firms operating at the global productivity frontier. New Zealand’s major problem is that frontier firms are underperforming because of their characteristics (e.g. small and lacking international connections) while productivity is overall adversely affected by a lack of competition, which generally creates barriers to exiting and insufficient reallocation of market shares from lower- to higher-productivity firms.

Item Type:Article
Full text:Publisher-imposed embargo until 18 February 2022.
(AM) Accepted Manuscript
File format - PDF
(1807Kb)
Status:Peer-reviewed
Publisher Web site:https://doi.org/10.1080/00779954.2020.1806339
Publisher statement:This is an Accepted Manuscript of an article published by Taylor & Francis in New Zealand Economic Papers on 18 August 2020 available online: http://www.tandfonline.com/10.1080/00779954.2020.1806339
Date accepted:26 July 2020
Date deposited:28 July 2020
Date of first online publication:18 August 2020
Date first made open access:18 February 2022

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