The importance of measuring dispersion in firm-level outcomes

Chad Syverson
2014 IZA World of Labor  
Recent research has revealed enormous variation in performance and growth among firms, which both drives and is driven by large reallocations of inputs and outputs across firms (churning) within industries and markets. These differences in firm-level outcomes and the associated turnover of firms affect many economic policies (both labor-and non-labor-oriented), on both a microeconomic and a macroeconomic scale, and are affected by them. Properly evaluating these policies requires familiarity
more » ... h the sources and consequences of firm-level variation and within-industry reallocation. Author's main message Familiarity with the nature of variation in firm-level performance and growth and the accompanying turnover of firms within an industry is important for effectively evaluating a range of economic policies affecting labor and other markets. That is because both microeconomic and macroeconomic phenomena and policies affect and are affected by firm-level dispersion and reallocation.
doi:10.15185/izawol.53 fatcat:igpgefjno5fthgwdd7yrohd2fa