ABSTRACT
Industrialisation is one of the core determinants of economic growth and development. At the macroeconomic level, we know that industrialisation and GDP growth rates can be influenced by economic policies, interest rates, availability of capital, availability and quality of labour, technological advances and productivity gains. More recently, scholars have deconstructed aggregate economic growth and demonstrated the importance of micro-mechanisms such as the entry and exit of firms, shedding new light on the inner working of macroeconomic output, employment and productivity growth in the case of both developed (Baily et al. 1992; Foster et al. 1998) and developing countries (Roberts and Tybout, 1996). An increasing number of studies focus on plants' dynamics in developing countries: Israel (Griliches and Regev 1992), Chile (Liu and Tybout, 1996; Tybout, 1996; Pavcnik, 2002), Colombia (Liu and Tybout, 1996; Roberts, 1996; Fernandes, 2007), Morocco (Haddad et al., 1996), Taiwan (Aw et al. 2001), Korea (Hahn, 2004), Estonia (Masso et al. 2004), China (Hahn, 2004), Turkey (Taymaz and Özler, 2007) and Indonesia (Ter Wengel and Rodriguez, 2006; Vial, 2008). Results show that the process of entry and exit of firms in industry often plays a major role in the formation of economic growth, in line with a Schumpeterian analysis of creative destruction. Countries falling into this category include Colombia (Liu and Tybout, 1996), Taiwan (Aw et al., 2001), the United Kingdom (Disney and Haskel, 2000), Korea (Hahn, 2004) and Indonesia (Vial, 2008). The study of firms’ turnover becomes then central to the study of economic growth.
