Productivity convergence among countries has been investigated extensively with mixed
results. This paper extends the analysis to the firm level to shed light on the debate of
convergence or non-convergence. We find productivity convergence among firms widely
in Japan, in both manufacturing industries and non-manufacturing ones. We obtain these
results taking explicit account of exiting firms as a source of selection biases. The convergence
rate is much faster among firms than countries. We also find that there are substantial
differences among industries in the convergence speed. IT industries that heavily rely on
technological progress show faster rates of convergence.
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