Another may be the fact that technological change and globalization increase the ability of more productive firms to gain market 4  share. These two possible explanations have markedly different policy implications. The scientific debate is currently ongoing, and during this workshop other possible explanations will be discussed in depth by several presenters.
Recent research has highlighted how firm dynamics may have a role in explaining not only long-term potential growth but also business cycle fluctuations. The procyclicality of entry rates could be driven by a tighter selection of new firms during downturns, and slacker entry requirements when the economy is doing well.