EconPapers    
Economics at your fingertips  
 

Policy Distortions and Aggregate Productivity with Endogenous Establishment-Level Productivity

Marina Tavares, Diego Restuccia () and Jose-Maria Da-Rocha
Additional contact information
Jose-Maria Da-Rocha: Universidade de Vigo

Authors registered in the RePEc Author Service: José María Da Rocha ()

No 1196, 2014 Meeting Papers from Society for Economic Dynamics

Abstract: The large differences in income per capita across countries are mostly explained by differences total factor productivity (TFP). What explains differences in TFP across countries? Evidence suggests that the (mis)allocation of factors of production across heterogenous production units is an important factor. We study factor misallocation across countries in a model with an endogenously determined distribution of establishment-level productivity. In this framework, policy distortions not only misallocate resources across a given set of productive units, but also worsens the distribution of establishment-level productivity as observed in the cross-country data. We show that in this model compared to the model with an exogenously specified distribution of establishment-level productivity, the quantitative effect of a given policy distortion is substantially amplified, by a factor of 2-fold. Moreover, the implications of the model are more in line with cross-country evidence.

Date: 2014
References: Add references at CitEc
Citations: View citations in EconPapers (15) Track citations by RSS feed

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
Working Paper: Policy Distortions and Aggregate Productivity with Endogenous Establishment-Level Productivity (2019) Downloads
Working Paper: Policy Distortions and Aggregate Productivity with Endogenous Establishment-Level Productivity (2017) Downloads
Working Paper: Policy Distortions and Aggregate Productivity with Endogenous Establishment-Level Productivity (2017) Downloads
Working Paper: Policy Distortions and Aggregate Productivity with Endogenous Establishment-Level Productivity (2016) Downloads
Working Paper: Policy Distortions and Aggregate Productivity with Endogenous Establishment-Level Productivity (2014) Downloads
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:red:sed014:1196

Access Statistics for this paper

More papers in 2014 Meeting Papers from Society for Economic Dynamics Society for Economic Dynamics Marina Azzimonti Department of Economics Stonybrook University 10 Nicolls Road Stonybrook NY 11790 USA. Contact information at EDIRC.
Bibliographic data for series maintained by Christian Zimmermann ().

 
Page updated 2021-05-03
Handle: RePEc:red:sed014:1196