ABSTRACT
This introduction presents an overview of key concepts discussed in the subsequent chapters of this book. The book explores the relationship between aggregate productivity differentials and the reallocation of outputs and inputs across individual producers through Schumpeterian dynamics–firms' entry, exit, expansion and contraction. Roberts and Tybout's and Bartelsman and Dhrymes' findings suggest that the process of creative destruction provides a potentially important contribution to an understanding of productivity growth. However, because the bulk of this work has been limited to manufacturing industry and firm levels, theoretical contributions and policy guidance are substantially limited. For this reason, the study reported here uses industry-specific data that encompass all two-digit sectors for US metropolitan area economies. In the most elementary terms, the research reports the develops and deploys indicators of both 'vertical' dimensions of creative destruction – job entry and exit – and their combination – a process called 'reallocation' – to explain variation in productivity rates of change across metro-scale economies.
