earticle

영어

We have estimated the contribution of firm dynamics to the aggregate labor productivity in the Korean economy during 2006-2012 through the Dynamic Olley Pakes Decomposition. The contribution of within effect to the growth of aggregate labor productivity is on average estimated as 48.5 percent, and the contribution of covariance effect as a reallocation effect is estimated as 49.4 percent in economy-wide. Especially the reallocation effect is considerable, so we can guess that the resource reallocation has been well operated, to some extent, during the second half of 2000s. In other words it shows that the production resource like as labor seems to have moved to the higher productivity firms or sectors. The covariance effects are relatively high in ICT-Producing sector such as electronic components, computer and communication equipment, as well as Motor vehicles, Financial institutions etc. Moreover the contribution of entry effect is estimated as –16.3 percent, and the contribution of exit effect is estimated as 18.5 percent in economy-wide. Thus the contribution of continuous firms to the growth of aggregate labor productivity is much higher than that of entry effect as well as exit effect. These results are estimated not from the establishment level data but from firm level data, and can be confirmed in the other micro level productivity analyses as well. What the entry effect is estimated as negative means that the levels of labor productivity of entrants are lower than that of continuous firms, so it tells us that the entrants are not as competitive or innovative as continuous firms, contrary to expectation, in terms of technical efficiency. Simultaneously what the exit effect is estimated as positive means the lower productivity firms than continuous firms have been exited from markets, so they contribute positively to the improvement of industry productivity. Meanwhile the contribution of continuous firms to the growth of value-added is 81.8 percent, and the contribution to the growth of employment is 65.0 percent in economy-wide. This situation has been similarly found in manufacturing and service. Therefore we have to highlight the contribution of continuous firms to the growth of productivity, value-added and employment in the short run. Moreover we need to maintain efficiently ‘creative destruction process’ of J. Schumpeter in market in the long run. It is essential that we should induce the creation of employment and the growth of productivity through not only making more competitive firms entered but also having more firms survived in a market at least.