The Korean manufacturing sector has undergone active structural transformation in the past few decades. Analyzing plant-level microdata, we document the patterns of entry, exit, job creation and destruction, and the growth of young plants during the industrial shift. This industrial shift involved active job reallocations, as well as the entry and exit of plants. We quantify the extent to which such plant-level dynamics explain productivity growth. We find that productivity gains through between-plant reallocations are correlated with the decrease in the measured productivity dispersion (i.e., misallocation). However, the contribution of reallocations to the aggregate productivity growth is relatively small. Within-plant productivity growth played an important role in the productivity growth of the Korean manufacturing sector.
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