Distorsions, resource al location and productivity in Latin America

Nezih Guner and Gustavo Ventura

No 244, Research Department working papers from CAF Development Bank Of Latinamerica

Abstract: We develop a span-of-control model where managerial skills are endogenous and the outcome of investments over the life cycle of managers. We calibrate such model to U.S. data, and use it to evaluate the interplay between idiosyncratic distortions and exogenous productivity in accounting for plan-size differences and output per worker in Mexico. We find that idiosyncratic distortions, as heavier implicit subsidies on small and large establishments, are essential to generate a plant-size distribution in line with Mexican data. Differences in exogenous productivity drive the bulk of output per-worker differences between the U.S. and Mexico.

Keywords: Sector financiero; Economía; Transformación productiva; Investigación socioeconómica (search for similar items in EconPapers)
Date: 2012
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Persistent link: https://EconPapers.repec.org/RePEc:dbl:dblwop:244

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