Entry costs, industry structure, and cross-country income and TFP differences
نویسندگان
چکیده
Entry costs vary dramatically across countries. To assess their impact we construct a model with endogenous entry and operation decisions by rms and calibrate it to match the U.S. distribution of rms by size. Higher entry costs lead to greater misallocation of productive factors and lower TFP and output. In the model, countries in the lowest decile of the entry costs distribution have 1.35 to 1.50 times higher TFP and 1.57 to 1.82 times higher output per worker than countries in the highest decile. As in the data, higher entry costs are associated with a larger informal sector and overall number of operating rms, a smaller number of legally registered rms, and a higher concentration of employment in the smallest and largest rms. JEL: L16, O11, O17, O4.
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ورودعنوان ژورنال:
- J. Economic Theory
دوره 146 شماره
صفحات -
تاریخ انتشار 2011