Click here for search results
A structural model of establishment and industry evolution : evidence from Chile, Volume 1
 
Author:Seker, Murat; Country:Chile;
Date Stored:2009/06/01Document Date:2009/06/01
Document Type:Policy Research Working PaperSubTopics:Scientific Research & Science Parks; Industrial Management; Water and Industry; Markets and Market Access; Science Education
Language:EnglishRegion:Latin America & Caribbean
Report Number:WPS4947Collection Title:Policy Research working paper ; no. WPS 4947
Volume No:1  

Summary: Many recent models have been developed to fit the basic facts on establishment and industry evolution. While these models yield a simple interpretation of the basic features of the data, they are too stylized to confront the micro-level data in a more formal quantitative analysis. In this paper, the author develops a model in which establishments grow by innovating new products. By introducing heterogeneity to a stylized industry evolution model, the analysis succeeds in explaining several features of the data, such as the thick right tail of the size distribution and the relations between age, size, and the hazard rate of exit, which had eluded existing models. In the model, heterogeneity in producer behavior arises through a combination of exogenous efficiency differences and accumulated innovations resulting from past endogenous research and development investments. Integrating these forces allows the model to perform well quantitatively in fitting data on Chilean manufacturers. The counterfactual experiments show how producers respond to research and development subsidies and more competitive market environments.

Official Documents
Official, scanned versions of documents (may include signatures, etc.)
File TypeDescriptionFile Size (mb)
PDF 47 pagesOfficial version*3.29 (approx.)
TextText version**
How To Order

* The official version is derived from scanning the final, paper copy of the document and is the official,
archived version including all signatures, charts, etc.
** The text version is the OCR text of the final scanned version and is not an accurate representation of the final text.
It is provided solely to benefit users with slow connectivity.



Permanent URL for this page: http://go.worldbank.org/N6J1PXE100