Universidad de Los Andes
Calle 19A # 1-37 Este. Bloque W.
Institutional Affiliation: Universidad de Los Andes
NBER Working Papers and Publications
|February 2019||Job creation in Colombia vs the U.S.: “up or out dynamics” meets “the life cycle of plants”.|
with , : w25550
There is growing consensus that a key difference between the U.S. and developing economies is that the latter exhibit slower employment growth over the life cycle of the average business. At the same time, the rapid post entry growth in the U.S. is driven by an “up or out dynamic”. We track manufacturing establishments in Colombia vs. the US and find that slower average life cycle growth in Colombia is driven by a less enthusiastic contribution of extraordinary growth plants and less dynamic selection of young underperforming plants. As a consequence, the size distribution of non-micro plants exhibits more concentration in small-old plants in Colombia, both in unweighted and employment-weighted bases. These findings point to a shortage of high-growth entrepreneurship and a relatively high ...