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- W635135534 abstract "The correlation between productivity and competition is an oft observed but incompletely understood result. Some suggest that there is a treatment effect of competition on measured productivity, for example, through a reduction of managerial slack. Others argue that greater competition makes unproductive establishments exit by reallocating demand to their productive rivals, raising observed average productivity via selection. I study the ready‐mix concrete industry and offer three perspectives on this ambivalence. First, using a standard decomposition approach, I look for evidence of greater reallocation of demand to productive plants in more competitive markets. Second, I model the establishment exit decision and construct a semiparametric selection correction to quantify the empirical significance of treatment and selection. Finally, I use a grouped instrumental variable quantile regression to test the distributional predictions of the selection hypothesis. I find no evidence for greater selection or reallocation in more competitive markets; instead, all three results suggest that measured productivity responds directly to competition. Potential channels include specialization and managerial inputs." @default.
- W635135534 created "2016-06-24" @default.
- W635135534 creator A5052002773 @default.
- W635135534 date "2020-01-01" @default.
- W635135534 modified "2023-09-27" @default.
- W635135534 title "Why Is Productivity Correlated With Competition?" @default.
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- W635135534 doi "https://doi.org/10.3982/ecta12926" @default.
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