Entry Barriers, Idiosyncratic Distortions, and the Firm Size Distribution

This paper studies the interaction between barriers to firm entry and distortions allocative efficiency in a standard model of dynamics. We derive strategy infer based on cross-country differences size distribution idiosyncratic distortions. The inferred resemble regulation-based indicators advanced economies but are substantially higher middle- low-income countries. Regulation-based cannot account for average underestimate aggregate productivity gains associated with their removal by up 8 percent average. (JEL D21, D24, H25, L11, L60)