The causes and consequences of sector-level job flows in Poland *

We look at the determinants and consequences of job reallocation in the 22 2-digit sectors of the manufacturing industry in Poland over the period 1995-99. We find that import competition and a competitive market structure (weak concentration) have a positive and significant effect on job reallocation. Moreover, higher job reallocation is associated with higher labour productivity growth in some specifications. This confirms implications from neo-Schumpeterian growth models: one channel through which competition might positively affect growth is through the reallocation of scarce resources from declining firms to rising ones. Copyright (c)The European Bank for Reconstruction and Development, 2003.