We analyze productivity growth in Chilean manufacturing 1979-2000 using the newly available panel of establishments drawn from the Census of Manufacturing. We examine the contribution to productivity growth of ?internal? restructuring (such as new technology and organizational change among survivors) and ?external? restructuring (exit, entry and market share change). We find that (a) ?external restructuring? accounts for 52% of industry labour productivity growth and 57% of industry TFP growth; (b) much of the external restructuring effect comes from the closing down of poorly-performing plants due to import penetration, and (c) import penetration is also an important determinant of internal restructuring in the long term.
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