The Sources of Capital Misallocation∗
نویسندگان
چکیده
We develop a methodology to analyze capital misallocation (dispersion in static marginal products) measure the contributions of technological/informational frictions and a rich class of firm-specific factors. An application to Chinese manufacturing firms reveals that adjustment costs and uncertainty, while significant, generate only a modest amount of MPK dispersion, which stems largely from other factors. For large US firms, adjustment costs are relatively more salient, though firm-specific factors still account for the bulk of observed misallocation. We also find that heterogeneity in technologies/markups account for a limited fraction of observed misallocation in China, but a potentially large share for US firms. JEL Classifications: D24, E22, O11, O47
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