2018/11 | LEM Working Paper Series | ||||||||||||||||
Reallocation and productivity during the Great Recession: evidence from French manufacturing firms |
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Giacomo Domini and Daniele Moschella |
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Keywords | |||||||||||||||||
firm productivity, selection, employment growth, global crisis
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JEL Classifications | |||||||||||||||||
D22, D24, L20, L25
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Abstract | |||||||||||||||||
According to the `cleansing hypothesis', recessions are periods in
which productivity-enhancing reallocation intensifies, shifting
resources away from less efficient to more efficient firms at a
greater pace. Does the Great Recession of 2008-2010 fit this view?
We address this question, studying the case of the French
manufacturing sector. Based on a panel of firms, built by matching
data from several sources, we investigate the contribution of
productivity to firm growth and survival over the period 2002-2013.
Our results show that, during the recent global crisis, more
productive firms decreased their advantage with respect to less
productive firms, in terms of both employment growth and probability
to survive, in disagreement with the cleansing hypothesis.
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