What Determines Productivity?

Chad Syverson

NBER Working Paper No. 15712
Issued in January 2010
NBER Program(s):Economic Fluctuations and Growth, Industrial Organization, Productivity, Innovation, and Entrepreneurship

Economists have shown that large and persistent differences in productivity levels across businesses are ubiquitous. This finding has shaped research agendas in a number of fields, including (but not limited to) macroeconomics, industrial organization, labor, and trade. This paper surveys and evaluates recent empirical work addressing the question of why businesses differ in their measured productivity levels. The causes are manifold, and differ depending on the particular setting. They include elements sourced in production practices--and therefore over which producers have some direct control, at least in theory--as well as from producers' external operating environments. After evaluating the current state of knowledge, I lay out what I see are the major questions that research in the area should address going forward.

Acknowledgments

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Document Object Identifier (DOI): 10.3386/w15712

Published: Chad Syverson, 2011. "What Determines Productivity?," Journal of Economic Literature, American Economic Association, vol. 49(2), pages 326-65, June. citation courtesy of