Misallocation and manufacturing TFP in Colombia

Adriana Camacho, Emily Conover and Dean Scrimgeour

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: Following Hsieh and Klenow (2009) this paper studies productivity dispersion in Colombian industrial establishments using the Colombian Annual Manufacturing Survey (AMS) from 1982 to 1998. We consider how much a hypothetical removal of firm-level distortions would increase manufacturing productivity in Colombia and compare it with the United States. We find that such a reallocation would increase manufacturing Total Factor Productivity (TFP) in Colombia around 15% more than in the United States in our baseline calibration. We find that distortions have been increasing over time. Productivity gains are larger if we use Colombia’s higher estimated elasticity of output with respect to capital. Furthermore we show that TFP is positively correlated with exporting status, age, size, and location in the Oriental region and the capital of the country.

Keywords: reallocating factors of production; Colombia; Total Factor Productivity; manufacturing; misallocation (search for similar items in EconPapers)
JEL-codes: D24 O47 (search for similar items in EconPapers)
Pages: 29 pages
Date: 2024-03-04
New Economics Papers: this item is included in nep-eff and nep-ure
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Published in Economía LACEA Journal, 4, March, 2024, 23(1), pp. 1 - 29. ISSN: 1533-6239

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Persistent link: https://EconPapers.repec.org/RePEc:ehl:lserod:122533

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