On average establishment size across sectors and countries

Pedro Bento and Diego Restuccia

Journal of Monetary Economics, 2021, vol. 117, issue C, 220-242

Abstract: A new dataset for the average employment size of establishments across sectors and countries is constructed from hundreds of sources. Establishments are larger in manufacturing than in services and in each sector larger in richer countries. The cross-country income elasticity of establishment size is remarkably similar across sectors, about 0.3. A two-sector model with endogenous firm entry, firm-level productivity, and measures of the correlation of wedges with productivity across firms in the data can account for the entire range of establishment size differences and almost 50 percent of the difference in non-agricultural GDP per capita between rich and poor countries.

Keywords: Establishment-size; Services; Distortions; Productivity (search for similar items in EconPapers)
JEL-codes: E02 E1 O1 O4 O5 (search for similar items in EconPapers)
Date: 2021
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Citations: View citations in EconPapers (15)

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Related works:
Working Paper: On Average Establishment Size across Sectors and Countries (2019)
Working Paper: On Average Establishment Size across Sectors and Countriesy (2018)
Working Paper: On Average Establishment Size across Sectors and Countries (2018)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:moneco:v:117:y:2021:i:c:p:220-242

DOI: 10.1016/j.jmoneco.2020.01.001

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