We build a model of firm-level innovation, productivity growth and reallocation featuring endogenous entry and exit. A key feature is the selection between high- and low-type firms, which differ in terms of their innovative capacity. We estimate the parameters of the model using detailed US...

Market structure is determined by the entry and exit decisions of individual producers. These decisions are driven by expectations of future profits which, in turn, depend on the nature of competition within the market. In this paper we estimate a dynamic, structural model of entry and exit in...

Competition among state and local governments to lure businesses has attracted considerable interest from economists, as well as legislators and policy makers. This paper quantifies the role of plant relocations in the geographic redistribution of manufacturing employment and examines the...

We study how US branch-banking deregulations affected the entry and exit of firms in the non-financial sector using establishment-level data from the US Census Bureau’s Longitudinal Business Database. The comprehensive micro-data allow us to study how the entry rate, the distribution of entry...

This paper proposes that diversification taxes firms’ existing organizational systems by altering routines, formal contract structures and strategies. I test the proposition that organizational adjustment costs associated with diversification erode incumbent competitive advantage, using novel...