تخریب خلاقانه و عدم تجانس عملکرد شرکت خاص

Traditional U.S. industries with higher firm-specific stock return and fundamentals performance heterogeneity use information technology (IT) more intensively and post faster productivity growth in the late 20th century. We argue that this mechanically reflects a wave of Schumpeter's creative destruction disrupting a wide swath of industries, with successful IT adopters unpredictably undermining established firms. This validates endogenous growth theory models of creative destruction and suggests intensified creative destruction as explaining findings associating greater firm-specific performance variation with higher per capita GDPs, economy growth rates, accounting standards, financial system development, and property right protection.

Elevated heterogeneity in firm-specific stock return and fundamentals performance is significantly correlated with more intensive use of information technology (IT) and faster productivity growth across a panel of traditional U.S. industries from 1971 to 2000. We argue that this suggests IT, at least in the early decades of its absorption into the economy in the late 20th century, induced a tremor of Schumpeter's (1912) creative destruction across a wide swath of U.S. industries. New innovators, with abnormally good performance, unpredictably and continually rose to dislodge established firms, abnormally depressing their performance. This suggests intensified creative destruction as a new explanation for the rising firm performance heterogeneity among publicly traded firms in recent decades in the U.S. and other developed economies observed by Morck, Yeung, and Yu (2000), Campbell, Lettau, Malkiel, and Xu (2001), Irvine and Pontiff (2004), Wei and Zhang (2006), and others. We study publicly traded firms in traditional U.S. manufacturing and nonmanufacturing industries such as lumber and wood products, retail trade, and motion pictures, that is, we abstract from IT-related firms. We do so because this avoids possible noise in dot.com stock returns and, more importantly, because Bresnahan and Trajtenberg (1995), Helpman and Trajtenberg (1998), Jovanovic and Rousseau (2005), and others argue that IT is a general purpose technology (GPT), which, like electricity in the early 20th century or steam power early in the industrial revolution, induces process and product innovation across most industries. Bresnahan and Trajtenberg (1995) and Helpman and Trajtenberg (1998) model GPTs driving economic growth, and cite IT as an example. Oliner and Sichel (2000), Jorgenson (2001), Stiroh (2002), and Brynjolfsson and Hitt (2003) also link IT to economy-wide enhanced productivity. Our findings complement approaches to economic growth theory, such as Pastor and Veronesi (2005), which model an economy absorbing a new technology and consequently exhibiting sustained elevated firm performance heterogeneity. More generally, this paper builds on Aghion and Howitt, 1992 and Aghion and Howitt, 1998, Aghion, Angeletos, Banerjee, and Manova (2004), Aghion, Howitt, and Mayer-Foulkes (2005), Acemoglu (2005), Acemoglu, Aghion, and Zilibotti (2006), and other formalizations of Schumpeter's (1912) concept of creative destruction. Other research into rising firm-specific performance variation can readily be reinterpreted in light of our findings. Pastor and Veronesi (2003), Fama and French (2004), Fink, Fink, Grullon, and Weston (2005), Bennett and Sias (2006), and Brown and Kapadia (2007) link heterogeneity to small or young firms. Philippon (2003), Irvine and Pontiff (2004), and Gaspar and Massa (2006) stress intensified competition and deregulation. Morck, Yeung, and Yu (2000), Fox, Morck, Yeung, and Durnev (2003), Bris, Goetzmann, and Zhu (2004), Durnev, Li, Morck, and Yeung (2004), Huang (2004), Ozoguz (2004), Biddle and Hilary (2006), and Jin and Myers (2006) link elevated firm performance heterogeneity to financial system development and transparency. Neatly tying all these findings together, Schumpeter (1912) links creative destruction to intensified competition from new, initially small, upstart firms that need external financing to grow rapidly,1Murphy, Shleifer, and Vishny (1991) model regulation repressing creative destruction, and Schumpeter's (1939) theory of business cycles posits that intensified competition trails waves of creative destruction. The link we find between IT and elevated firm performance heterogeneity nonetheless survives controls for all these factors as well as for other relevant industry characteristics, suggesting a robust overarching role for IT. Our results should comfort financial economists, like Roll (1988), who lament the low R2 statistics of standard asset pricing models caused by high firm-specific stock return variation in the U.S. and other developed countries. If this reflects faster creative destruction in countries with better institutions, there is no cause for lamentation. Asset pricing models not only retain their basic validity, but may also find a new following among growth theorists as gauges of the intensity of creative destruction and related phenomena. Creative destruction is usually envisioned as creative innovators destroying laggards utterly; however, in practice, the laggards may only be beaten back for a while. Firm-specific performance heterogeneity may thus be a finer and more nuanced metric of the intensity of creative destruction than firm exit rates. The paper is structured as follows. Section 2 describes our IT intensity, firm performance heterogeneity, and total factor productivity (TFP) measures. Section 3 covers regressions and Section 4 discusses interpretation and statistical robustness issues. Section 5 concludes with a brief discussion of the implications of our results.

Elevated firm performance heterogeneity—cross-sectional firm-specific variation in individual firms’ stock returns and real sales growth—is associated with intensive investment in information technology (IT). These findings are robust to a wide range of specifications, control variables, and econometric approaches. Our results support IT serving as a general purpose technology (GPT), inducing a wave of innovation across many industries. Some firms make good use of these opportunities, while others do not, widening the chasm between winner and loser firms. This firm performance heterogeneity is a readily observable measure of ongoing creative destruction, the process which Schumpeter (1912) argues sustains economic growth. Consistent with this view, industries with elevated firm performance heterogeneity exhibit faster total factor productivity (TFP) growth. This interpretation of firm-specific performance heterogeneity permits reinterpretation of several recent findings regarding firm-specific stock returns and fundamentals variation: 1. Creative destruction is more intense in higher income countries: Stocks in countries with higher incomes (Morck, Yeung, and Yu, 2000) or faster economic growth (Durnev, Li, Morck, and Yeung, 2004) exhibit higher firm-specific return variation. If this reflects more intense creative destruction, these findings support Aghion, Howitt, and Mayer-Foulkes’ (2005) theoretical prediction of more creative destruction in higher income countries, and factor accumulation in lower income countries. They also more generally support the theories of Schumpeter (1912) and their formalizations by Aghion and Howitt, 1992 and Aghion and Howitt, 1998, Aghion, Angeletos, Banerjee, and Manova (2004), Aghion, Howitt, and Mayer-Foulkes (2005), Acemoglu (2005) and Acemoglu, Aghion, and Zilibotti (2006), who link economic growth to the rise of innovative firms and the decline of stagnant ones. 2. Creative destruction is more intense if private property rights are stronger: Morck, Yeung, and Yu (2000) link greater firm-specific performance heterogeneity to the quality of government, by which they mean an absence of corruption, an efficient judiciary, and a general respect for the rule of law. La Porta, Lopez-de-Silanes, and Shleifer (1999) argue that governments that provide these institutional public goods are protecting private property rights. La Porta, Lopez-de-Silanes, and Shleifer (2006) show effective private property rights protection to be a necessary condition for financial development. These support Baumol (1990), Murphy, Shleifer, and Vishny (1991), Gans, Hsu, and Stern (2002), and others who argue that sound private property rights are a pre-condition for creative destruction. 3. Creative destruction is more intense if corporations are more transparent: La Porta, Lopez-de-Silanes, and Shleifer (2006) argue that corporate transparency is critical to making investors’ de jure protection effective. Morck, Yeung, and Yu (2000), Bris, Goetzmann, and Zhu (2004), Durnev, Li, Morck, and Yeung (2004), Fox, Morck, Yeung, and Durnev (2003), Huang (2004), Ozoguz (2004), and Jin and Myers (2006) all link corporate transparency to firm-specific variation. Our findings suggest one possible underlying economic explanation: better accounting disclosure and more generally transparent stock markets permit entrepreneurs to raise external funds to invest in new technologies, like IT, by making capital more secure and cheaper. 4. Creative destruction is more intense if financial systems are more developed: Schumpeter (1912) argues that entrepreneurs are often penurious, and so need financing to develop their innovations. He therefore argues that a well-developed financial system is a prerequisite for growth through creative destruction. Consistent with this, King and Levine (1993) show financial development to be of first-order importance to economic growth. Wurgler (2000) links greater firm-specific performance heterogeneity to financial development. Bris, Goetzmann, and Zhu (2004) and Durnev, Li, Morck, and Yeung (2004) find higher firm-specific stock return variation in more financially developed countries. Durnev, Li, Morck, and Yeung (2004) also report higher TFP growth in countries with elevated firm-specific stock return variation. Davis, Haltiwanger, Jarmin, and Miranda (2006) report that the increase in firm-level volatility found by Morck, Yeung, and Yu (2000), Campbell, Lettau, Malkiel, and Xu (2001), and others in U.S. stocks is evident only in listed firms. This accords with Schumpeter's (1912) argument that creative destruction requires external financing, and suggests that public equity financing might be especially important. Given these linkages, the findings of Morck, Yeung, and Yu (2000) and Jin and Myers (2006) can be reinterpreted as indirectly supporting the importance of financial development to creative destruction. 5. Creative destruction is more intense in more financially open economies: Li, Morck, Yang, and Yeung (2004) show that firm-specific stock return variation rises in emerging economies after they open to international portfolio investment. Caves (1982) and others argue that openness encourages technology transfer, so the effect Li, Morck, Yang, and Yeung (2004) observe could partially reflect creative destruction associated with the new technology. 6. Creative destruction need not destabilize the macroeconomy: Durnev, Li, Morck, and Yeung (2004) find faster growth in countries whose stock returns display greater firm-specific variation, while Ramey and Ramey (1995) find countries with elevated macroeconomic variation growing slower.20 The two results are not mutually exclusive because firm-specific variation cancels out in aggregate measures. This fallacy of composition in variation means that the elevated firm-specific variation associated with creative destruction can aggregate into low volatility in macroeconomic growth.21 Our thesis that elevated firm performance heterogeneity signals intensified creative destruction in no way excludes other explanations of firm-specific performance variation. Philippon (2003), Irvine and Pontiff (2004), and Gaspar and Massa (2006) emphasize increased competition, and Schumpeter (1939) posits that waves of creative destruction induce subsequent waves of price competition. Pastor and Veronesi (2003), Fama and French (2004), Fink, Fink, Grullon, and Weston (2005), Bennett and Sias (2006), Davis, Haltiwanger, Jarmin, and Miranda (2006), and Brown and Kapadia (2007) link rising firm-specific stock return variation to the growing importance of smaller, younger firms. This also dovetails with our thesis, for Schumpeter (1912) argues that new, initially small firms are the carriers of new technology and the harbingers of creative destruction. We believe that our thesis underscores the importance of these findings and other findings regarding firm-specific performance heterogeneity by providing a unifying framework for this emerging literature. This need not, of course, preclude other partial explanations, and we welcome further work in this area.