Resource Misallocation and Productivity: Evidence from Mexico

Author/Editor:

Florian Misch ; Christian Saborowski

Publication Date:

May 15, 2018

Electronic Access:

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Summary:

This paper explores the role for specific structural distortions in explaining Mexico’s weak productivity growth through the resource misallocation channel. The paper makes two contributions. First, we validate the approach of measuring misallocation indirectly (Hsieh and Klenow, 2009) by illustrating a close correlation between misallocation and per capita incomes across Mexican states. Second, we exploit the large variation in resource misallocation within industries and across states together with unusually rich data at the firm, local, and industry level to shed light on its determinants. We identify several well-defined distortions that have a statistically and economically meaningful effect on productivity via resource misallocation.

Series:

Working Paper No. 18/112

Subject:

English

Publication Date:

May 15, 2018

ISBN/ISSN:

9781484353578/1018-5941

Stock No:

WPIEA2018112

Price:

$18.00 (Academic Rate:$18.00)

Format:

Paper

Pages:

32

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