Input misallocation and productivity dynamics

Result code in IS VaVaI

<a href="https://www.isvavai.cz/riv?ss=detail&h=RIV%2F60460709%3A41110%2F25%3A106250" target="_blank" >RIV/60460709:41110/25:106250 - isvavai.cz</a>

Result on the web

<a href="https://www.cambridge.org/core/journals/macroeconomic-dynamics/article/input-misallocation-and-productivity-dynamics/C8FE2178E3DFC5862C19DA2CD52489A6" target="_blank" >https://www.cambridge.org/core/journals/macroeconomic-dynamics/article/input-misallocation-and-productivity-dynamics/C8FE2178E3DFC5862C19DA2CD52489A6</a>

DOI - Digital Object Identifier

<a href="http://dx.doi.org/10.1017/S1365100525000033" target="_blank" >10.1017/S1365100525000033</a>

Result language

angličtina

Original language name

Input misallocation and productivity dynamics

Original language description

This paper builds on Hsieh and Klenow's (2009) model to offer a refined analysis of how input misallocations impact aggregate total factor productivity (TFP). We enhance the original model by relaxing the assumption of uniform input prices and adopting an econometric approach to estimate parameters using firm-level data. Estimation of model parameters and allocation efficiency is based on the system of input demand and the production function. We use an indirect inference approach to estimate the system to avoid maximum likelihood estimation, which often faces convergence issues, when there are numerous constraints. We demonstrate our model using the US firm-level manufacturing panel data from 1975 to 2010. Our final sample contains 55,518 observations. We divide the manufacturing industry into seven major categories. Our findings indicate that between 1975 and 2010, the average productivity growth rate was 2.8% but could have reached 3.2% without misallocation, highlighting the substantial gains possible through better resource allocation.

Czech name

—

Czech description

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Type

J_imp - Article in a specialist periodical, which is included in the Web of Science database

CEP classification

—

OECD FORD branch

50202 - Applied Economics, Econometrics

Project

—

Continuities

S - Specificky vyzkum na vysokych skolach

Publication year

2025

Confidentiality

S - Úplné a pravdivé údaje o projektu nepodléhají ochraně podle zvláštních právních předpisů

Name of the periodical

MACROECONOMIC DYNAMICS

ISSN

1365-1005

e-ISSN

1365-1005

Volume of the periodical

29

Issue of the periodical within the volume

neuvedeno

Country of publishing house

CZ - CZECH REPUBLIC

Number of pages

25

Pages from-to

1-25

UT code for WoS article

001435755800001

EID of the result in the Scopus database

2-s2.0-85218940139