Possible reasons for low aggregate productivity:

  • Failure of middling performers to catch up to top performers
  • Limited or ineffective connection to other groups; which may impede cross-border diffusion of know-how.
  • Weak diffusion (transfer of knowledge, know-how) from top to middle and low performers
  • Weak competitive forces may result in low performers existing longer than they should.

These issues can apply to the study of firm productivity, but also the study of productivity of individuals.

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