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Impeded Industrial Restructuring: The Growth Penalty
Author(s) -
Audretsch David B.,
Carree Martin A.,
Van Stel Adriaan J.,
Thurik A. Roy
Publication year - 2002
Publication title -
kyklos
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.766
H-Index - 58
eISSN - 1467-6435
pISSN - 0023-5962
DOI - 10.1111/1467-6435.00178
Subject(s) - restructuring , process (computing) , economics , economic restructuring , empirical evidence , industrial organization , business , economy , finance , computer science , operating system , philosophy , epistemology
This paper documents that a process of industrial restructuring has been transforming the developed economies, where large corporations are accounting for less economic activity and small firms are accounting for a greater share of economic activity. Not all countries, however, are experiencing the same shift in their industrial structures. Little is known about the cost of resisting this restructuring process. The goal of this paper is to identify whether there is a cost, measured in terms of forgone growth, of an impeded restructuring process. The cost is measured by linking growth rates of European countries to deviations from the ‘optimal’ industrial structure. The empirical evidence suggests that countries impeding the restructuring process pay a penalty in terms of forgone growth.