Firm dynamics and productivity growth

Scoping future research
Business innovation Business Economic growth Productivity Research New Zealand

This document assesses the state of knowledge about firm dynamics in New Zealand and answers the following questions:  1) why firms grow? 2) how firm performance affects aggregate productivity growth? (3) what role policy can play in improving productivity growth. The objective is to identify any significant gaps in research to date, in terms of answering the three questions listed above.

Key findings:

  1. Descriptive analysis predominates in the research and there is comparatively little research, at least in recent years, that can be a basis for diagnosing problems and informing policy decisions
  2. Existing descriptive analyses provide mixed evidence on important questions such as whether new firms contribute positively to productivity growth.




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