Firm´s growth through resources´ reallocation

The importance of re-allocating human and capital resources in order to increase growth is justified and assessed. Based on macro economic models and their basic identities, growth is computed considering an economy with only two sectors, having different labor productivities and capital per worker values, when a number of workers move between sectors. Conclusions are taken from the model and illustrated by the case of the Portuguese economy. Finally, it is shown that, at firms´ level, the same conclusion may apply. As such, firms should develop strategies for their business lines improving labor productivities and re-allocating their resources accordingly.