One feature of the US economy over the last five decades has been the transition away from manufacturing towards services. This column takes a firm-level view of structural change from 1977-2019 to study these sectoral dynamics in the US. The authors develop a novel measure of proprietary in-house knowledge and show that it provides firms with a competitive advantage related to their successful transition to services. Results support the premise that firms play a key role in developing knowledge and using it to adapt to changing economic circumstances.

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11 August 2022

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Vox EU

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https://cepr.org/voxeu/columns/structural-change-within-versus-across-firms-evidence-us

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