Firm productivity in Israeli industry 1979–1988

Abstract

An analysis of a large panel data set on Israeli industrial firms finds that most of the growth in aggregate productivity comes from productivity changes within firms rather than from entry, exit, or differential growth; that firms which will exit in the future have lower productivity performance several years earlier (the ‘shadow of death’ effect); and that, overall, there was little total factor productivity growth in Israeli industry during 1979–1988 (another ‘lost decade’).