Do Productivity Shocks Cause Inputs Misallocation?
Davide Luparello
Papers from arXiv.org
Abstract:
Firms exhibit varying productivity levels even within narrowly defined industries and face uncertainty when predicting future performance. This paper investigates the link between productivity uncertainty, heterogeneity, and misallocation across all inputs. Using a model where heterogeneous firms face staggered productivity shocks, creating gaps between expected and actual productivity, I find a positive association between marginal revenue product dispersions and productivity variability. The analysis reveals that productivity shocks predominantly drive marginal revenue product dispersions. By comparing baseline estimates with those from the factor shares approach, I highlight the limitations of the latter method in analyzing the effects of productivity evolution.
Date: 2023-06, Revised 2025-01
New Economics Papers: this item is included in nep-eec, nep-eff and nep-fdg
References: View references in EconPapers View complete reference list from CitEc
Citations:
Downloads: (external link)
http://arxiv.org/pdf/2306.08760 Latest version (application/pdf)
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:arx:papers:2306.08760
Access Statistics for this paper
More papers in Papers from arXiv.org
Bibliographic data for series maintained by arXiv administrators ().