Do Crises Catalyze Creative Destruction? Firm-level Evidence from Indonesia

Using Indonesian manufacturing census data (1991–2001), this paper rejects the hypothesis that the East Asian crisis unequivocally improved the reallocative process. The correlation between productivity and employment growth did not strengthen, and the crisis induced the exit of relatively productiv...

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Main Authors:	Hallward-Driemeier, Mary, Rijkers, Bob
Format:	Journal Article
Language:	en_US
Published:	MIT Press 2014
Subjects:	productivity job flows firm survival financial crises creative destruction employment growth East Asian crisis
Online Access:	http://hdl.handle.net/10986/16607

id	okr-10986-16607
recordtype	oai_dc
spelling	okr-10986-166072021-04-23T14:03:31Z Do Crises Catalyze Creative Destruction? Firm-level Evidence from Indonesia Hallward-Driemeier, Mary Rijkers, Bob productivity job flows firm survival financial crises creative destruction employment growth East Asian crisis Using Indonesian manufacturing census data (1991–2001), this paper rejects the hypothesis that the East Asian crisis unequivocally improved the reallocative process. The correlation between productivity and employment growth did not strengthen, and the crisis induced the exit of relatively productive firms. The attenuation of the relationship between productivity and survival was stronger in provinces with comparatively lower reductions in minimum wages, but not due to reduced entry, changing loan conditions, or firms connected to the Suharto regime suffering disproportionately. On the bright side, firms that entered during the crisis were relatively more productive, which helped mitigate the reduction in aggregate productivity. 2014-01-23T20:36:18Z 2014-01-23T20:36:18Z 2013-12 Journal Article Review of Economics and Statistics 1530-9142 http://hdl.handle.net/10986/16607 en_US http://creativecommons.org/licenses/by-nc-nd/3.0/igo CC BY-NC-ND 3.0 IGO http://creativecommons.org/licenses/by-nc-nd/3.0/igo World Bank MIT Press Publications & Research Publications & Research :: Journal Article Indonesia
repository_type	Digital Repository
institution_category	Foreign Institution
institution	Digital Repositories
building	World Bank Open Knowledge Repository
collection	World Bank
language	en_US
topic	productivity job flows firm survival financial crises creative destruction employment growth East Asian crisis
spellingShingle	productivity job flows firm survival financial crises creative destruction employment growth East Asian crisis Hallward-Driemeier, Mary Rijkers, Bob Do Crises Catalyze Creative Destruction? Firm-level Evidence from Indonesia
geographic_facet	Indonesia
relation	http://creativecommons.org/licenses/by-nc-nd/3.0/igo
description	Using Indonesian manufacturing census data (1991–2001), this paper rejects the hypothesis that the East Asian crisis unequivocally improved the reallocative process. The correlation between productivity and employment growth did not strengthen, and the crisis induced the exit of relatively productive firms. The attenuation of the relationship between productivity and survival was stronger in provinces with comparatively lower reductions in minimum wages, but not due to reduced entry, changing loan conditions, or firms connected to the Suharto regime suffering disproportionately. On the bright side, firms that entered during the crisis were relatively more productive, which helped mitigate the reduction in aggregate productivity.
format	Journal Article
author	Hallward-Driemeier, Mary Rijkers, Bob
author_facet	Hallward-Driemeier, Mary Rijkers, Bob
author_sort	Hallward-Driemeier, Mary
title	Do Crises Catalyze Creative Destruction? Firm-level Evidence from Indonesia
title_short	Do Crises Catalyze Creative Destruction? Firm-level Evidence from Indonesia
title_full	Do Crises Catalyze Creative Destruction? Firm-level Evidence from Indonesia
title_fullStr	Do Crises Catalyze Creative Destruction? Firm-level Evidence from Indonesia
title_full_unstemmed	Do Crises Catalyze Creative Destruction? Firm-level Evidence from Indonesia
title_sort	do crises catalyze creative destruction? firm-level evidence from indonesia
publisher	MIT Press
publishDate	2014
url	http://hdl.handle.net/10986/16607
_version_	1764434271389351936

Do Crises Catalyze Creative Destruction? Firm-level Evidence from Indonesia

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