Understanding Productivity Growth: Entry, Survival, and the Competitive Process

Do new plants outperform old plants? This study looks at a variety of factors to answer that question.

Document Highlights

This study continues a series of occasional research reports that analyze historical patterns of productivity and growth in order to improve our understanding of the dynamics of the competitive process. One issue of considerable interest to managers is the relative importance of new and old plants in determining productivity growth. To address that question, this study measures the productivity performance of new entrants and long-term survivors over the last 30 years. The results indicate that recent entrants have higher productivity than earlier entrants, surviving plants become more productive with age, and that competitive forces lead to similar productivity of plants from different cohorts.