Competition, selection, and productivity growth in the Chilean manufacturing industry

Competition is considered as a key driver of productivity growth. However, the empirical evidence on its impact is scant in developing countries. Using information from manufacturing plants for the period 1995–2007, we analyze the impact of competition on firm selection and productivity growth in Chile. Our results indicate that competition has a positive effect on total factor productivity (TFP) growth, especially for laggard firms. We find...