Abstract
According to the 'cleansing hypothesis', recessions are periods in which productivity-enhancing reallocation intensifies, shifting resources away from less efficient to more efficient firms at a faster pace. Does the Great Recession of 2008-2010 fit this view? We address this question, studying the case of the French manufacturing sector. Based on a panel of firms, built by matching several data sources, we analyze the dynamics of the relation between productivity and reallocation over the period 2002-2013. Our results show that, during the Great Recession, more productive firms decreased their advantage with respect to less productive firms, in terms of both employment growth and probability to survive, in disagreement with the cleansing hypothesis. This attenuation of productivity-enhancing reallocation was significantly driven by the trade collapse and credit crunch that were associated with the crisis, while it does not emerge to depend on labor-market regulations and anti-crisis policies.
| Original language | English |
|---|---|
| Pages (from-to) | 783-810 |
| Number of pages | 28 |
| Journal | Industrial and Corporate Change |
| Volume | 31 |
| Issue number | 3 |
| DOIs | |
| Publication status | Published - Jun 2022 |
| Externally published | Yes |
Bibliographical note
Funding Information:D.M. received financial support by the Italian Ministry of Education and Research under the SIR Programme (project code RBSI14JAFW) and the PRIN2017 Programme (grant 201799ZJSN). This work was also supported by a public grant overseen by the French National Research Agency (ANR) as part of the 'Investissements d'avenir' program (reference; ANR-10-EQPX-17, Centre d'accès sécurisé aux données).
Publisher Copyright:
© 2022 The Author(s).
Funding
D.M. received financial support by the Italian Ministry of Education and Research under the SIR Programme (project code RBSI14JAFW) and the PRIN2017 Programme (grant 201799ZJSN). This work was also supported by a public grant overseen by the French National Research Agency (ANR) as part of the 'Investissements d'avenir' program (reference; ANR-10-EQPX-17, Centre d'accès sécurisé aux données).