The Micro and Macro Productivity of Nations

Stephen Ayerst, Duc Nguyen and Diego Restuccia

Working Papers from University of Toronto, Department of Economics

Abstract: We examine micro and macro productivity differences across nations using cross-country firm-level data and a quantitative model of misallocation that integrates firms' operational (selection) and investment (technology) decisions. Empirically, less developed countries display greater distortions and wider dispersion in firm productivity, driven largely by the higher prevalence of low-productivity firms. Quantitatively, cross-country differences in measured distortions account for most of the observed micro-level patterns and over half of aggregate labor productivity gaps. Both selection and technology channels are essential to matching the data, while static misallocation also plays an important role, albeit smaller.

Keywords: Firms; productivity; size; distortions; misallocation; selection; technology. (search for similar items in EconPapers)
JEL-codes: O11 O14 O4 (search for similar items in EconPapers)
Pages: Unknown pages
Date: 2025-10-30
New Economics Papers: this item is included in nep-bec, nep-eff and nep-tid
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Related works:
Working Paper: The Micro and Macro Productivity of Nations (2024)
Working Paper: The Micro and Macro Productivity of Nations (2024)
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Persistent link: https://EconPapers.repec.org/RePEc:tor:tecipa:tecipa-806

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