Misallocation and Manufacturing TFP in China and India
نویسندگان
چکیده
Resource misallocation can lower aggregate total factor productivity (TFP). We use micro data on manufacturing establishments to try to quantify the extent of this misallocation in China and India in recent years. Viewing the data through the prism of the Melitz model of monopolistically competitive firms, we estimate sizable gaps in marginal products of labor and capital across plants within narrowly-defined industries in each country. When capital and labor are hypothetically reallocated to equalize the marginal products, we calculate manufacturing TFP gains on the order of a factor of 2. Output gains are nearly a factor of 4 if physical capital accumulates to restore the original average marginal product of capital.
منابع مشابه
Quarterly Journal of Economics Misallocation and Manufacturing Tfp in China and India *
Resource misallocation can lower aggregate total factor productivity (TFP). We use microdata on manufacturing establishments to quantify the potential extent of misallocation in China and India versus the United States. We measure sizable gaps in marginal products of labor and capital across plants within narrowly defined industries in China and India compared with the United States. When capit...
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Resource misallocation can lower aggregate total factor productivity (TFP). We use micro data on manufacturing establishments to quantify the potential extent of misallocation in China and India compared to the U.S. Compared to the U.S., we measure sizable gaps in marginal products of labor and capital across plants within narrowly-defined industries in China and India. When capital and labor a...
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