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Discussion Paper Details

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Title: Impeded Industrial Restructuring: The Growth Penalty

Author(s): David B Audretsch and A R Roy Thurik

Publication Date: December 2000

Keyword(s): Economic Growth, Entrepreneurship, Firm Size Distribution and Industry Structure

Programme Area(s): Industrial Organization

Abstract: This paper documents that a process of industrial restructuring has been transforming the developed economies, where large corporations are accounting for less economic activity and small firms are accounting for a greater share of economic activity. Not all countries, however, are experiencing the same shift in their industrial structures. Very little is known about the cost of resisting this restructuring process. The goal of this paper is to identify whether there is a cost, measured in terms of foregone growth, of an impeded restructuring process. The cost is measured by linking growth rates of European countries to deviations from the optimal industrial structure. The empirical evidence suggests that countries impeding the restructuring process pay a penalty in terms of foregone growth.

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Bibliographic Reference

Audretsch, D and Thurik, A. 2000. 'Impeded Industrial Restructuring: The Growth Penalty'. London, Centre for Economic Policy Research. https://cepr.org/active/publications/discussion_papers/dp.php?dpno=2648