Pozzi, Andrea; Schivardi, Fabiano - C.E.P.R. Discussion Papers - 2012
We disentangle the contribution of unobserved heterogeneity in idiosyncratic demand and productivity to firm growth. We … important as productivity shocks for firm growth. Second, firms respond to shocks less than a frictionless model would predict …, suggesting the existence of adjustment frictions. Finally, the degree of under-response is much larger for TFP shocks. This …