Publication Type
Working Paper
Version
publishedVersion
Publication Date
8-2025
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.
Keywords
Reallocation, R&D, innovation, productivity
Discipline
Corporate Finance | Finance
First Page
1
Last Page
33
Identifier
10.2139/ssrn.5390660
Publisher
SSRN
Citation
Yoshiki Ando, James Bessen, and Xiupeng Wang.
Is R&D rivalry slowing the growth of productive firms?. (2025). 1-33.
Available at: https://ink.library.smu.edu.sg/soe_research/2847
Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial-No Derivative Works 4.0 International License.
Additional URL
http://doi.org/10.2139/ssrn.5390660