Do Schumpeterian Waves of Creative Destruction Lead to Higher Productivity? Panel Data Evidence from Poland

Abstract

We look at the determinants and consequences of job reallocation in the 22 2-digit sectors of the manufacturing industry in Poland over the period 1993-1997. Import competition and competitve market structure (weak concentration) are found to lead to more reallocation. Moreover, more reallocation seems to be associated with more poductive industries in some specifications. This confirms implications from neo-Schumpterian growth models: one channel through which competition might positively affect growth is through the reallocation of scarce resources from declining firms to rising ones.