Multi-establishment firms, misallocation, and productivity

Xican Xi

Journal of Economic Dynamics and Control, 2023, vol. 154, issue C

Abstract: This paper presents an equilibrium model of firm growth that emphasizes multi-establishment operations. The model captures key features of firm growth and the firm size distribution in the US, and is used to analyze the effects of establishment-level distortions in developing countries. The distortions substantially reduce aggregate output and play a key role in generating cross-country differences in firm and establishment sizes. When compared to a model that considers only single-establishment firms, my model finds a 17% and 13% larger impact of distortions on aggregate output for India and Mexico, respectively. This amplification effect is due to the decreased proportion of multi-establishment firms.

Keywords: Misallocation; Technology capital; Multi-establishment firms; Aggregate productivity (search for similar items in EconPapers)
JEL-codes: E23 L25 O14 O40 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0165188923001112
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:dyncon:v:154:y:2023:i:c:s0165188923001112

DOI: 10.1016/j.jedc.2023.104705

Access Statistics for this article

Journal of Economic Dynamics and Control is currently edited by J. Bullard, C. Chiarella, H. Dawid, C. H. Hommes, P. Klein and C. Otrok

More articles in Journal of Economic Dynamics and Control from Elsevier
Bibliographic data for series maintained by Catherine Liu ().