Elena Huergo and Jordi Jaumandreu
"Firms' age, process innovation and productivity growth"
JEL codes: D24, L6, O3
Keywords: productivity, process innovation, Solow residual, firm age

Abstract: This paper looks directly at the impact of firmsí age and (process) innovations on productivity growth. A model that specifies productivity growth as an unknown function of these variables is devised and estimated using semi-parametric methods. Results show that firms enter the market experiencing high productivity growth and that above-average growth rates tend to last for many years, but also that productivity growth of surviving firms converges. Process innovations at some point then lead to extra productivity growth, which also tends to persist somewhat attenuated for a number of years.

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