Reallocation, Firm Turnover and Efficiency: Selection on Productivity or Profitability
          
                  Lucia Foster, John C. Haltiwanger, and Chad Syverson
      
  
, 
            1
      (    
                  98
      
  
)
            American Economic Review
      
            394-425
      
            March
      
            2008
          
                          
      
  
  Abstract
              We investigate the nature of selection and productivity growth in industries where we observe producer-level quantities and prices separately. We show there are important differences between revenue and physical productivity. Because physical productivity is inversely correlated with price while revenue productivity is positively correlated with price, previous work linking (revenue- based) productivity to survival confounded the separate and opposing effects of technical efficiency and demand on survival, understating the true impacts of both.
