Reallocation and productivity in resource-rich economies

Rodrigo Heresi

Journal of International Economics, 2023, vol. 145, issue C

Abstract: I study the firm-level dynamic response of a commodity-exporting economy to global cycles in commodity prices. I propose a heterogeneous-firms model endogenizing manufacturing productivity slowdowns through reallocation towards less productive firms. Within a given sector, commodity booms reallocate market share away from exporters because of exchange rate appreciation and away from capital-intensive firms because of the increase in the required rate of return to capital. Using microdata for Chile, the largest copper producer worldwide, I provide empirical evidence for these channels. When fed with the commodity super-cycle of 2004–2012, the calibrated model generates between 13% to 32% of the observed productivity slowdown.

Keywords: Productivity; Resource booms; Open economy macroeconomics (search for similar items in EconPapers)
JEL-codes: D24 F41 Q33 (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:eee:inecon:v:145:y:2023:i:c:s0022199623001290

DOI: 10.1016/j.jinteco.2023.103843

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