Cross-country differences in productivity: the role of allocation and selection

Arbeitspapier

This paper combines different strands of the productivity literature to investigate the effect of idiosyncratic (firm-level) policy distortions on aggregate outcomes. On the one hand, a growing body of empirical research has been relating cross-country differences in key economic outcomes, such as productivity or output per capita, to differences in policies and institutions that shape the business environment. On the other hand, a branch of empirical research has attempted to shed light on the determinants of productivity at the firm-level and the evolution of the distribution of productivity across firms within each industry. In this paper, we exploit a rich source of data with harmonized statistics on firm level variation within industries for a number of countries. Our key empirical finding is that there is substantial variation in the within-industry covariance between size and productivity across countries, and this variation is affected by the presence of idiosyncratic distortions. We develop a model in which heterogeneous firms face adjustment frictions (overhead labor and quasi-fixed capital) and idiosyncratic distortions. We show that the model can be readily calibrated to match the observed cross-country patterns of the within-industry covariance between productivity and size and thus help to explain the observed differences in aggregate performance.

Angaben zum Objekt

• Sprache: Englisch

Verweise und Beziehungen

• Erschienen in: Series: IZA Discussion Papers ; No. 4578

Klassifikation und Themen

• Klassifikation: Wirtschaft ; Institutions and the Macroeconomy ; Production, Pricing, and Market Structure; Size Distribution of Firms ; Industrial Organization and Macroeconomics: Industrial Structure and Structural Change; Industrial Price Indices ; Firm Performance: Size, Diversification, and Scope ; Comparative Studies of Countries
• Thema: Firm heterogeneity ; productivity ; allocation of resources ; distortions ; Unternehmensentwicklung ; Produktivität ; Wirtschaftspolitik ; Allokation ; Wirkungsanalyse ; Welt

Beteiligte, Orts- und Zeitangaben

• Ereignis: Geistige Schöpfung
• (wer): Bartelsman, Eric J. ; Haltiwanger, John ; Scarpetta, Stefano
• Ereignis: Veröffentlichung
• (wer): Institute for the Study of Labor (IZA)
• (wo): Bonn
• (wann): 2009

Weitere Informationen

• Handle: http://hdl.handle.net/10419/36105
• Letzte Aktualisierung: 10.03.2025, 11:41 MEZ