Varying Heterogeneity among U.S. Firms: Facts and Implications
U.S. firms' stock return volatility rose fivefold from 1971 through 2000 and then reverted to near 1971 levels by 2006. This was driven mainly by a rise and fall in the firm-specific, rather than systematic, component of volatility. Firm-level total factor productivity growth volatility exhibited a similar pattern. We hypothesize that firm heterogeneity, reflected in firm-specific volatility, rises as a new general purpose technology (GPT) propagates across the economy and then ebbs once the GPT is widespread. Measuring GPT adoption by information technology capital intensity, we find robust cross-industry empirical evidence supporting the hypothesis. © 2011 The President and Fellows of Harvard College and the Massachusetts Institute of Technology.
Year of publication: |
2011
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Authors: | Chun, Hyunbae ; Kim, Jung-Wook ; Morck, Randall |
Published in: |
The Review of Economics and Statistics. - MIT Press. - Vol. 93.2011, 3, p. 1034-1052
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Publisher: |
MIT Press |
Saved in:
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