ABSTRACT
Heterogeneity among firms – in terms of efficiency – has been widely documented in literature. Syverson (2004), for example, demonstrates that within 4-digit SIC industries in the US manufacturing sector, the ratio of total factor productivity among plants at the 90th percentile of productivity distribution is in the order of 2 to 1 with respect to the 10th percentile. By enlarging the range between the two percentiles, the ratio easily arrives at 4. The picture is not very different for other economic systems. 1 It follows that more productive firms are more likely to survive than those with lower productivity: in the American case, the estimates indicate that those that fall below the 20th percentile exit from the market within 5 years.
