nep-eff New Economics Papers
on Efficiency and Productivity
Issue of 2022‒11‒14
twenty-one papers chosen by
Angelo Zago
Università degli Studi di Verona

  1. Measuring Productivities for the 38 OECD Member Countries: An Input-Output Modelling Approach By Bragoudakis, Zacharias; Kasimati, Evangelia; Pierros, Christos; Rodousakis, Nikolaos; Soklis, George
  2. Employer Cooperation, Productivity, and Wages: New Evidence from Inter-Firm Formal Network Agreements By Devicienti, Francesco; Grinza, Elena; Manello, Alessandro; Vannoni, Davide
  3. Measuring Total Factor Productivity Using the Enterprise Surveys : A Methodological Note By Francis,David C.; Karalashvili,Nona; Maemir,Hibret Belete; Rodriguez Meza,Jorge Luis
  4. U.S. Hog Production: Rising Output and Changing Trends in Productivity Growth By Davis, Christopher G.; Dimitri, Carolyn; Nehring, Richard; Collins, LaPorchia A.; Haley, Mildred; Ha, Kim A.; Gillespie, Jeffrey
  5. Econometric analysis of labor productivity in industrial enterprises By Khomitov, Komiljon; Nasimov, Dilmurod
  6. Digging into the Technological Dimension of Environmental Productivity By Belloc, Filippo; Valentini, Edilio
  7. Technology Within and Across Firms By Cirera,Xavier; Comin,Diego Adolfo; Vargas Da Cruz,Marcio Jose; Lee,Kyungmin
  8. Capital-Labor Substitution and Misallocation By Mallick, Debdulal; Maqsood, Nabeel
  9. Inventories, Input Costs, and Productivity Gains from Trade Liberalizations By Khan,Shafaat Yar; Khederlarian, Armen
  10. Financial Constraints of EU firms: A Sectoral Analysis By ASDRUBALI Pierfederico; HALLAK Issam; HARASZTOSI Peter
  11. Technology and Demand Drivers of Productivity Dynamics in Developed and Emerging Market Economies By Dieppe,Alistair Matthew; Francis,Neville Ricardo; Kindberg-Hanlon,Gene
  12. Factor prices and induced technical change in the industrial revolution By Otojanov, Ravshonbek; Fouquet, Roger; Granville, Brigitte
  13. Farm Labor, Human Capital, and Agricultural Productivity in the United States By Wang, Sun Ling; Hoppe, Robert A; Hertz, Thomas; Xu, Shicong
  14. Science after Communism: Structural Change, Peers, and Productivity in East German Science By Önder, Ali; Torgler, Benno; Lariviere, Vincent; Moy, Naomi; Chan, Ho Fai; Schilling, Donata
  15. Disentangling regional innovation capability: what really matters? By Ganau, Roberto; Grandinetti, Roberto
  16. Cost Minimization Analysis of a Running Firm with Economic Policy By Mohajan, Haradhan
  17. Agricultural Technology: Why Does the Level of Agricultural Production Remain Low Despite Increased Investments in Research and Extension? By Baconguis, Rowena T.
  18. Identification Properties for Estimating the Impact of Regulation on Markups and Productivity By Sampi Bravo,James Robert Ezequiel; Jooste,Charl; Vostroknutova,Ekaterina
  19. Deindustrialization and Industry Polarization By Michael Sposi; Kei-Mu Yi; Jing Zhang
  20. Digital Technology Uses among Informal Micro-Sized Firms : Productivity and Jobs Outcomes in Senegal By Atiyas,Ä°zak; Dutz,Mark Andrew
  21. Productivity Loss and Misallocation of Resources in Southeast Asia By De Nicola,Francesca; Nguyen,Ha Minh; Loayza,Norman V.

  1. By: Bragoudakis, Zacharias; Kasimati, Evangelia; Pierros, Christos; Rodousakis, Nikolaos; Soklis, George
    Abstract: Using a multisectoral model and the latest data from the OECD Input-Output Tables (IOTs�2021 ed.), this article estimates labour and capital productivities of the 38 OECD member countries. As measures of the productivity of labour, we consider the inverse of the vertically integrated labour coefficients, while Perron–Frobenius theorems are employed so as to measure capital productivity. In this respect, the productive technologies and the intersectoral relationships of each economy are taken into account. We further investigate the relationship between productivity, economic efficiency and living standards. Findings indicate that the impact of capital productivity on higher living standards depends on the evolutionary and institutional background of the economy at hand.
    Keywords: capital productivity; input-output analysis; labour productivity; OECD member counties; Perron–Frobenius eigenvalues
    JEL: E61
    Date: 2021–04–01
    URL: http://d.repec.org/n?u=RePEc:pra:mprapa:114892&r=eff
  2. By: Devicienti, Francesco (University of Turin); Grinza, Elena (University of Milan); Manello, Alessandro (University of Turin); Vannoni, Davide (University of Turin)
    Abstract: Using uniquely rich administrative matched employer-employee data, we investigate the impact of formal network agreements (FNAs) among firms under two perspectives. First, we assess the impact of joining a FNA on several indicators of firm performance, and total factor productivity. Second, we investigate whether and how such effects are transmitted to the workers, in terms of wage changes. On the firm-level side, we find an overall significant and economically relevant positive effect of FNAs on firm performance, which resists a large set of robustness tests. However, such a positive effect on firms does not translate into tangible benefits for the workers, on average. After estimating an array of multiple-way fixed effects wage regressions, we find a negative, though small, wage effect. Moreover, we detect a rather marked heterogeneity in the impacts on both firms and workers. The estimation of rent-sharing equations, as well as other tests that exploit unionization data, suggest that the negative effects on wages might be explained by a decrease in workers' bargaining power following the introduction of FNAs.
    Keywords: Inter-firm cooperation, formal network agreements, firm performance, total factor productivity (TFP), wages, matched employer-employee data
    JEL: L14 D24 J31
    Date: 2022–10
    URL: http://d.repec.org/n?u=RePEc:iza:izadps:dp15617&r=eff
  3. By: Francis,David C.; Karalashvili,Nona; Maemir,Hibret Belete; Rodriguez Meza,Jorge Luis
    Abstract: Total factor productivity is a key element of economic growth and an important performance metric for policy makers. This note describes the methodology for measuring firm-level total factor productivity using the World Bank's Enterprise Surveys cross-country data. It also presents some estimates recovered from the production function. Two versions of the production function are estimated: one Cobb-Douglas, the other a more flexible translog specification. Both estimations are at the two-digit industry level pooling all the Enterprise Surveys data across economies. Evidence is found against using a Cobb-Douglas specification, which is more parsimonious, and in favor of using the flexible translog specification. The resulting firm-level estimates are all published in the Enterprise Surveys database with a unique firm identifier to link to the rest of the Enterprise Surveys data; because the estimates are reliant on new data, they are updated periodically as new Enterprise Surveys data become available. The results show that: (i) median firms operate close to constant returns to scale; (ii) gross-output and value-added production functions provide similar ranking of sectors in terms of output elasticities, capital intensity, and returns to scale; (iii) there is large, firm-level heterogeneity in output elasticities; and (iv) gross-output-based total factor productivity measures are less dispersed than the value-added ones.
    Keywords: Common Carriers Industry,Food&Beverage Industry,Plastics&Rubber Industry,Textiles, Apparel&Leather Industry,Pulp&Paper Industry,Construction Industry,Business Cycles and Stabilization Policies,General Manufacturing,Employment and Unemployment,Information Technology,Transport Services
    Date: 2020–12–08
    URL: http://d.repec.org/n?u=RePEc:wbk:wbrwps:9491&r=eff
  4. By: Davis, Christopher G.; Dimitri, Carolyn; Nehring, Richard; Collins, LaPorchia A.; Haley, Mildred; Ha, Kim A.; Gillespie, Jeffrey
    Abstract: The hog sector began a major transformation in the early 1990s, and since then, it has experienced productivity growth and structural change, increased output, and expanded exports. This study examined changes in hog production from 1992 to 2017. During this period, production contracts became the most common business model in hog production, and hog farms grew larger and more specialized. Technological advancements improved productivity, though changes in production costs were mixed.
    Keywords: Agribusiness, Agricultural Finance, Farm Management, Industrial Organization, Livestock Production/Industries, Productivity Analysis
    Date: 2022–08–16
    URL: http://d.repec.org/n?u=RePEc:ags:usdami:327369&r=eff
  5. By: Khomitov, Komiljon; Nasimov, Dilmurod
    Abstract: The article provides an econometric analysis of the factors influencing the growth of labor productivity, which is an important basis for achieving economic efficiency of industrial enterprises, and identifies rational parameters of enterprise development based on the prospects of these factors
    Keywords: Industry, economic efficiency, economic growth, labor productivity, econometric analysis, multifactor econometric model, correlationregression analysis
    JEL: A14 E24 M54
    Date: 2022
    URL: http://d.repec.org/n?u=RePEc:pra:mprapa:114814&r=eff
  6. By: Belloc, Filippo; Valentini, Edilio
    Abstract: We propose a mixture model approach to identify locally optimal technologies and to dissect environmental productivity (output produced per unit of emission) into a technological and a managerial component. For a large sample of plants covered by the EU ETS, we find that the share of plants adopting the frontier technology is about 21%. We also find that the average output gains that plants could reach by adopting optimal technologies and managerial practices are 75% and 80% respectively. These results remain qualitatively similar after addressing endogeneity of emissions. Finally, we match EU ETS data with balance-sheet data on parent companies and find that better environmental technologies tend to be adopted by larger, listed, multi-plant and international companies, while older firms and firms with higher intangibles assets intensity more commonly show improved environmental management. Our results suggest that existing technologies have large unexploited potentials and deliver important insights for policy.
    Keywords: Environmental Economics and Policy, Production Economics, Productivity Analysis
    Date: 2022–10–25
    URL: http://d.repec.org/n?u=RePEc:ags:feemwp:328580&r=eff
  7. By: Cirera,Xavier; Comin,Diego Adolfo; Vargas Da Cruz,Marcio Jose; Lee,Kyungmin
    Abstract: This study collects data on the sophistication of technologies used at the business function level for a representative sample of firms in Vietnam, Senegal, and the Brazilian state of Ceara. The analysis finds a large variance in technology sophistication across the business functions of a firm. The within-firm variance in technology sophistication is greater than the variance in sophistication across firms, which in turn is greater than the variance in sophistication across regions or countries. The paper documents a stable cross-firm relationship between technology at the business function and firm levels, which it calls the technology curve. Significant heterogeneity is uncovered in the slopes of the technology curves across business functions, a finding that is consistent with non-homotheticities in firm-level technology aggregators. Firm productivity is positively associated with the within-firm variance and the average level of technology sophistication. Development accounting exercises show that cross-firm variation in technology accounts for one-third of cross-firm differences in productivity and one-fifth of the agricultural versus non-agricultural gap in cross-country differences in firm productivity.
    Keywords: Food Security,Business Cycles and Stabilization Policies,General Manufacturing,Textiles, Apparel&Leather Industry,Pulp&Paper Industry,Food&Beverage Industry,Common Carriers Industry,Construction Industry,Plastics&Rubber Industry,Information Technology,Health Service Management and Delivery,Health Care Services Industry,Transport Services
    Date: 2020–11–16
    URL: http://d.repec.org/n?u=RePEc:wbk:wbrwps:9476&r=eff
  8. By: Mallick, Debdulal; Maqsood, Nabeel
    Abstract: We explore the role of the elasticity of substitution between capital and labor (σ) in misallocation of resources. We show, both analytically and empirically using the cross-country firm level survey data, that the extent of misallocation is substantially large for low σ compared to the Cobb-Douglas value of one that the extant literature invariably assumes. When σ is low, dispersion in marginal products of capital across firms will be larger for given dispersion in capital-labor ratios because marginal product now declines more rapidly with increasing capital. The extent of misallocation is even larger when σ varies across firms. Given the overwhelming evidence that σ
    Keywords: Misallocation, Elasticity of Substitution; CES Production Function; Total Factor Productivity
    JEL: D24 O11 O14 O47
    Date: 2022–10
    URL: http://d.repec.org/n?u=RePEc:pra:mprapa:115090&r=eff
  9. By: Khan,Shafaat Yar; Khederlarian, Armen
    Abstract: Sourcing internationally entails additional costs due to larger per inventory holdings. When firms switch toward foreign sources, these unobserved costs increase. This paper revisits the effect of trade liberalization on firms’ productivity taking into account the inventory premium of importing and input cost heterogeneity. Through model simulations, the paper shows that in the presence of inventory holding costs, their omission in revenue-based productivity measures leads to a systematic overestimation of the elasticity of productivity to input tariffs. Controlling for the firm’s import intensity and inventory usage in the estimation of productivity corrects for the bias. The paper studies the relevance of this potential bias during India’s trade liberalization in the early 1990s. First, it documents that inventory holdings of intermediate goods increased significantly with import intensity and input tariffs. Second, it extends a standard productivity estimation procedure with a control function of the various firm-level input costs. The mismeasurement channel accounts for around 35 percent of the estimated productivity gains. Consistent with the gradual adjustment to the tariff reductions, the bias in the response of firm-level productivity is backloaded.
    Keywords: International Trade and Trade Rules,Construction Industry,Common Carriers Industry,Food&Beverage Industry,Business Cycles and Stabilization Policies,Plastics&Rubber Industry,Pulp&Paper Industry,General Manufacturing,Textiles, Apparel&Leather Industry,Trade and Services,Trade and Multilateral Issues,Armed Conflict
    Date: 2021–03–03
    URL: http://d.repec.org/n?u=RePEc:wbk:wbrwps:9564&r=eff
  10. By: ASDRUBALI Pierfederico; HALLAK Issam (European Commission - JRC); HARASZTOSI Peter (European Commission - JRC)
    Abstract: In this paper we provide estimates of financial constraints in all EU sectors. Our empirical strategy consists in using the Orbis firm-level dataset to construct financial constraint measures for each of the firms in our sample, and then aggregate the results either by NACE code, or by business similarity. We use two main – somewhat complementary – financial constraint indices proposed by Ferrando et al (2015), and then submit them to a battery of robustness tests, including the alternative financial constraints estimators developed by Kaplan and Zingales (1997), Whited and Wu (2006), and Hadlock and Pierce (2010). We also establish correlations between a sector’s degree of financial constraints and other sectoral characteristics, such as firm size, TFP, capital intensity, and innovativeness. The results show that sectoral financial constraints do not converge for all indicators; yet there are sectors that classify at the bottom or top by two or more financial constraints measures. Tighter sectoral financial constraints tend to be associated with a lower firm size, a capital intensity much higher than average, and a total factor productivity lower than average.
    Keywords: Financial constraints, capital intensity, firm size, productivity
    Date: 2022–09
    URL: http://d.repec.org/n?u=RePEc:ipt:iptwpa:jrc130317&r=eff
  11. By: Dieppe,Alistair Matthew; Francis,Neville Ricardo; Kindberg-Hanlon,Gene
    Abstract: Frequently, factors other than structural developments in technology and production efficiency drive changes in labor productivity in advanced and emerging market and developing economies (EMDEs). This paper uses a new method to extract technology shocks that excludes these influences, resulting in lasting improvements in labor productivity. The same methodology in turn is used to identify a stylized example of the effects of a demand shock on productivity. Technology innovations are accompanied by higher and more rapidly increasing rates of investment in EMDEs relative to advanced economies, suggesting that positive technological developments are often capital-embodied in the former economies. Employment falls in both advanced economies and EMDEs following positive technology developments, with the effect smaller but more persistent in EMDEs. Uncorrelated technological developments across economies suggest that global synchronization of labor productivity growth is due to cyclical (demand) influences. Demand drivers of labor productivity are found to have highly persistent effects in EMDEs and some advanced economies. Unlike technology shocks, however, demand shocks influence labor productivity only through the capital deepening channel, particularly in economies with low capacity for counter-cyclical fiscal policy. Overall, non-technological factors accounted for most of the fall in labor productivity growth during 2007-08 and around one-third of the longer-term productivity decline after the global financial crisis.
    Keywords: International Trade and Trade Rules,Macroeconomic Management,Labor Markets,Rural Labor Markets
    Date: 2021–01–25
    URL: http://d.repec.org/n?u=RePEc:wbk:wbrwps:9525&r=eff
  12. By: Otojanov, Ravshonbek; Fouquet, Roger; Granville, Brigitte
    Abstract: Using historical data for the 1700–1914 period, this paper analyses the nature and direction of technical change in Britain. The evidence in this paper indicates that, over this long period, labour-saving technology adoption was a major response to changes in relative factor prices, thus supporting the hypothesis that ‘induced innovation’ was a major driver of technical change during the British industrial revolution. Labour saving was made possible and sustained by capital-augmenting and energy-augmenting technical change coupled with continuous capital accumulation and abundant energy supplies. This process placed the British economy on a higher capital–labour ratio equilibrium, and was the primary force driving sustained productivity growth, which further raised wages and living standards.
    Keywords: factor-saving technical change; induced innovation; industrial revolution; Grantham Research Institute on Climate Change and the Environment at the London School of Economics; and the ESRC Centre for Climate Change Economics and Policy (CCCEP); ES/R009708/1
    JEL: N73
    Date: 2022–09–26
    URL: http://d.repec.org/n?u=RePEc:ehl:lserod:114978&r=eff
  13. By: Wang, Sun Ling; Hoppe, Robert A; Hertz, Thomas; Xu, Shicong
    Abstract: This report discusses the contribution of farm labor in U.S. agricultural growth and assesses the changing composition of the U.S. farm labor force with special attention to the changes in educational attainment among farm operators and other workers.
    Keywords: Productivity Analysis, Labor and Human Capital
    Date: 2022–02
    URL: http://d.repec.org/n?u=RePEc:ags:uersrr:327178&r=eff
  14. By: Önder, Ali; Torgler, Benno; Lariviere, Vincent; Moy, Naomi; Chan, Ho Fai; Schilling, Donata
    JEL: I23 J24 J61 O33
    Date: 2022
    URL: http://d.repec.org/n?u=RePEc:zbw:vfsc22:264021&r=eff
  15. By: Ganau, Roberto; Grandinetti, Roberto
    Abstract: Where does innovation come from? And do all regions innovate similarly? We deal with these questions by highlighting the complexity of the concepts of innovation capability and performance, and by testing their association at the European Union regional level. We disentangle inputs of innovation capability, and consider regional heterogeneity in institutional quality, to understand the relative endowment of what innovation inputs is associated with higher relative innovation performance. We find that ‘formal’ inputs–public and business R&D expenditure–do not work unconditionally and everywhere, and that less ‘formal’ ones–e.g., non-R&D expenditure and firms collaborating for innovation–matter particularly in regions with relative low-quality institutions. Moreover, institutional quality emerges as an innovation productivity-enhancing factor.
    Keywords: European Union; Innovation capability; innovation performance; institutional quality; regions
    JEL: O30 O52 R11
    Date: 2021–07–03
    URL: http://d.repec.org/n?u=RePEc:ehl:lserod:114921&r=eff
  16. By: Mohajan, Haradhan
    Abstract: In this paper the Cobb-Douglas production function is operated in a firm for the analysis of the cost minimization policies. In an economic world, gain of profit depends on the efficient use of raw materials and use of various techniques of the cost minimization. A firm’s main target is to make maximum profit. Scientific based and efficient but minimum cost procedures will favor in this regard. To increase local and global demands, a firm of course develop production sector. An attempt has been taken in this study to minimize cost by considering four inputs, such as capital, labor, principal raw materials, and other inputs to form the economic model subject to a production constraint within the budget.
    Keywords: Lagrange multiplier, minimum cost, Cobb-Douglas production function
    JEL: C3 C51 C61 C67
    Date: 2022–04–18
    URL: http://d.repec.org/n?u=RePEc:pra:mprapa:114951&r=eff
  17. By: Baconguis, Rowena T.
    Abstract: Adoption of new practices and technologies influences farm productivity and agricultural growth. Countries invest in research and extension to ensure continuous growth both at the farm and industry level. This paper investigates agricultural technology production, its knowledge transfer, and farm and industry level performance. The study used the agricultural innovation systems (AIS) as lens in investigating the agricultural performance of the country, focusing on rice and swine industry. The governance of research, development, and extension continues to be negatively affected by the overlaps among research and development institutions and fragmentation of extension. The government continues to underinvest in research, the bulk of which goes to the rice program. Extension programs focus primarily on the distribution of private goods. The promotion of hybrid rice and farm machinery represented sizable investments, but adoption of these had not been widespread. The swine industry, on the other hand, continues to rely on imported inputs for nutrition and biologics. Recommendations focus on further minimizing inefficiencies in the research and extension functions of the government institutions. Comments to this paper are welcome within 60 days from the date of posting. Email publications@pids.gov.ph.
    Keywords: agricultural growth;technological promotion; technological adoption; agricultural innovation systems; agricultural performance
    Date: 2022
    URL: http://d.repec.org/n?u=RePEc:phd:dpaper:dp_2022-06&r=eff
  18. By: Sampi Bravo,James Robert Ezequiel; Jooste,Charl; Vostroknutova,Ekaterina
    Abstract: This paper addresses several shortcomings in the productivity and markup estimation literature. Using Monte-Carlo simulations, the analysis shows that the methods in Ackerberg, Caves and Frazer (2015) and De Loecker and Warzynski (2012) produce biased estimates of the impact of policy variables on markups and productivity. This bias stems from endogeneity due to the following: (1) the functional form of the production function; (2) the omission of demand shifters; (3) the absence of price information; (4) the violation of the Markov process for productivity; and (5) misspecification when marginal costs are excluded in the estimation. The paper addresses these concerns using a quasi-maximum likelihood approach and a generalized estimator for the production function. It produces unbiased estimates of the impact of regulation on markups and productivity. The paper therefore proposes a work-around solution for the identification problem identified in Bond, Hashemi, Kaplan and Zoch (2020), and an unbiased measure of productivity, by directly accounting for the joint impact of regulation on markups and productivity.
    Keywords: International Trade and Trade Rules,Competition Policy,Competitiveness and Competition Policy,De Facto Governments,Democratic Government,State Owned Enterprise Reform,Public Sector Administrative and Civil Service Reform,Economics and Finance of PublicInstitution Development,Public Sector Administrative&Civil Service Reform,Macroeconomic Management,Governance Diagnostic Capacity Building,Economic Forecasting,Trade Policy
    Date: 2021–01–21
    URL: http://d.repec.org/n?u=RePEc:wbk:wbrwps:9523&r=eff
  19. By: Michael Sposi; Kei-Mu Yi; Jing Zhang
    Abstract: We add to recent evidence on deindustrialization and document a new pattern: increasing industry polarization over time. We assess whether these new features of structural change can be explained by a dynamic open economy model with two primary driving forces, sector-biased productivity growth and sectoral trade integration. We calibrate the model to the same countries used to document our patterns. We find that sector-biased productivity growth is important for deindustrialization by reducing the relative price of manufacturing to services, and sectoral trade integration is important for industry polarization through increased specialization. The interaction of these two driving forces is also essential.
    Keywords: Structural Change; International Trade; Sector Biased Productivity Growth
    JEL: F11 F43 O41 O11
    Date: 2021–12–19
    URL: http://d.repec.org/n?u=RePEc:fip:fedhwp:94917&r=eff
  20. By: Atiyas,Ä°zak; Dutz,Mark Andrew
    Abstract: This paper explores the use of digital technologies among informal micro-sized firms in Senegal, their association with productivity, sales, exports and jobs, and the role of age and gender dimensions of enterprise owners. The study uses a new national sample of over 500 firms, of which over 90 percent are not fully formal and over 95 percent are micro-sized, employing five or fewer full-time employees. The analysis finds that using a 2G mobile phone is significantly positively correlated both with productivity and sales, and using a smartphone is associated with an additional premium relative to using a 2G. The largest statistically significant conditional correlate of productivity, sales and jobs is a more specialized internal-to-the-firm management technology proxying for management capabilities more generally, namely inventory control/point of sales (POS) software. Use of digital technologies to facilitate external-to-the-firm transactions, namely using mobile money to pay suppliers and to receive payments from customers are also statistically significant conditional correlates of productivity and sales. Using a smartphone is also positively correlated with exporting (while using only a 2G phone is not). Finally, there are significant digital divides in the use of digital technologies across age and gender groupings.
    Keywords: Labor Markets,Food&Beverage Industry,Textiles, Apparel&Leather Industry,Pulp&Paper Industry,Common Carriers Industry,Construction Industry,Business Cycles and Stabilization Policies,General Manufacturing,Plastics&Rubber Industry,Food Security,Gender and Development,Energy Policies&Economics
    Date: 2021–03–09
    URL: http://d.repec.org/n?u=RePEc:wbk:wbrwps:9573&r=eff
  21. By: De Nicola,Francesca; Nguyen,Ha Minh; Loayza,Norman V.
    Abstract: This paper examines within-sector resource misallocation in three Southeast Asian countries -- Indonesia, Malaysia, and Vietnam. The methodology accounts for measurement error in revenues and costs. The firm-level evidence suggests that measurement error is substantial, resulting in an overestimation of misallocation by as much as 30 percent. Nevertheless, resource misallocation across firms within a sector remains large, albeit declining. The findings imply that there are considerable potential gains from efficient reallocation -- above 80 percent for Indonesia and around 20 to 30 percent for Malaysia and Vietnam. Private domestic firms and firms with higher productivity appear to face larger distortions that prevent them from expanding.
    Keywords: Food&Beverage Industry,Common Carriers Industry,Construction Industry,Business Cycles and Stabilization Policies,Plastics&Rubber Industry,Pulp&Paper Industry,Textiles, Apparel&Leather Industry,General Manufacturing,Industrial Economics,Economic Theory&Research,Economic Growth,International Trade and Trade Rules,Democratic Government,Public Sector Administrative and Civil Service Reform,De Facto Governments,State Owned Enterprise Reform,Economics and Finance of PublicInstitution Development,Public Sector Administrative&Civil Service Reform,Macroeconomic Management,Economic Forecasting,Governance Diagnostic Capacity Building
    Date: 2020–11–30
    URL: http://d.repec.org/n?u=RePEc:wbk:wbrwps:9483&r=eff

This nep-eff issue is ©2022 by Angelo Zago. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at http://nep.repec.org. For comments please write to the director of NEP, Marco Novarese at <director@nep.repec.org>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.