An analysis of a large panel data set on Israeli industrial firms find
s that most of the growth in aggregate productivity comes from product
ivity changes within firms rather than from entry, exit, or differenti
al growth; that firms which will exit in the future have lower product
ivity performance several years earlier (the 'shadow of death' effect)
; and that, overall, there was little total factor productivity growth
in Israeli industry during 1979-1988 (another 'lost decade').