Document Type
Working Paper
Publication Date
8-2025
Language
en-US
Abstract
The reallocation of jobs to more productive firms is a substantial component of aggregate productivity growth, yet job reallocation rates have declined substantially in the United States. This paper explores the hypothesis that greater technological rivalry has exacerbated adjustment costs, slowing reallocation. Using microdata at the US Census and estimates of technological rivalry in firm growth regressions, we find that technological rivalry slows firm responses to productivity shocks. Firms do not expand as rapidly in the face of higher obsolescence risk. Estimating counterfactual firm growth from 1997-2018, we find that growing technological rivalry accounts for most of the decline in job reallocation. Counterintuitively, rising technological rivalry may slow reallocation, dampening aggregate productivity growth.
Recommended Citation
Yoshiki Ando, James Bessen & Xiupeng Wang,
Is R&D Rivalry Slowing the Growth of Productive Firms?
,
Boston University School of Law Research Paper Series
(2025).
Available at:
https://scholarship.law.bu.edu/faculty_scholarship/4140
