Download or read book Trade Productivity and mis allocation written by Antoine Berthou and published by . This book was released on 2019 with total page 37 pages. Available in PDF, EPUB and Kindle. Book excerpt: We examine the gains from globalization in the presence of firm heterogeneity and potential resource misallocation. We show theoretically that without distortions, bilateral and export liberalizations increase aggregate welfare and productivity, while import liberalization has ambiguous effects. Resource misallocation can either amplify, dampen or reverse the gains from trade. Using model-consistent measures and unique new data on 14 European countries and 20 industries in 1998-2011, we empirically establish that exogenous shocks to export demand and import competition both generate large aggregate productivity gains. Guided by theory, we provide evidence consistent with these effects operating through reallocations across firms in the presence of distortions: (i) Both export and import expansion increase average firm productivity, but the former also shifts activity towards more productive firms, while the latter acts in reverse. (ii) Both export and import exposure raise the productivity threshold for survival, but this cut-off is not a sufficient statistic for aggregate productivity. (iii) Efficient institutions, factor and product markets amplify the gains from import competition but dampen those from export access.

Download or read book Trade Productivity and Mis allocation written by and published by . This book was released on 2020 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Trade Technology Diffusion and Misallocation written by Malik Curuk and published by . This book was released on 2012 with total page 48 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Trade and Growth in a Model of Allocative Inefficiency written by Richard D. Cothren and published by . This book was released on 2015 with total page 25 pages. Available in PDF, EPUB and Kindle. Book excerpt: The empirical evidence on the causal relationship between international trade and economic growth is inconclusive. While some studies show that trade leads to growth, others have pointed to a reverse causation. In this paper we develop a model of international trade and productivity growth in the presence of a misallocation of resources. Misallocation in a country arises as a result of lobbying by firms to establish barriers to the competitive allocation of labor. Misallocation prevents the country from exploiting its technological comparative advantage and leads to a reduction in the volume of trade in the absence of any explicit trade barriers. In the model, whether barriers diminish or worsen with productivity growth depends on the extent of the initial resource misallocation. If the initial resource misallocation is not severe then productivity growth leads to diminishing barriers and vice versa. In either case, productivity growth strengthens the comparative advantage over time and therefore increases the volume of trade.

Download or read book Under Rewarded Efforts written by Santiago Levy Algazi and published by Inter-American Development Bank. This book was released on 2018-07-11 with total page 323 pages. Available in PDF, EPUB and Kindle. Book excerpt: Why has an economy that has done so many things right failed to grow fast? Under-Rewarded Efforts traces Mexico’s disappointing growth to flawed microeconomic policies that have suppressed productivity growth and nullified the expected benefits of the country’s reform efforts. Fast growth will not occur doing more of the same or focusing on issues that may be key bottlenecks to productivity growth elsewhere, but not in Mexico. It will only result from inclusive institutions that effectively protect workers against risks, redistribute towards those in need, and simultaneously align entrepreneurs’ and workers’ incentives to raise productivity.

Download or read book Markups and Misallocation with Trade and Heterogeneous Firms written by Ariel Weinberger and published by . This book was released on 2017 with total page 59 pages. Available in PDF, EPUB and Kindle. Book excerpt: With non-homothetic preferences, a monopolistic competition equilibrium is inefficient in the way inputs are allocated towards production. This paper quantifies a gains from trade component that is present only when reallocation is properly measured in a setting with heterogeneous firms that charge variable markups. Due to variable markups, reallocations initiated by aggregate shocks impact allocative efficiency depending on the adjustment of the market power distribution. My measurement compares real income growth with the hypothetical case of no misallocation in quantities. Using firm and industry-level data from Chile during a period with large terms of trade gains, I find that cost reductions are associated with losses in allocative efficiency because firms pass-through measured productivity gains into markups. From industry-year variation, there is also evidence that industries that import a larger share of their inputs become more misallocated as a result of exchange rate appreciations compared to open sectors whose output competition becomes fiercer.

Download or read book Essays in International Trade written by Jong Hyun Chung and published by . This book was released on 2019 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: This thesis consists of three essays in international trade. The first chapter explores the consequences of firm-level resource misallocation on the gains from trade liberalization. While the standard trade models explain observed firm heterogeneity with variance in firms' innate productivity, discriminatory policies and political connections may also affect the firm size and generate resource misallocation across firms. In this chapter, I show that the productivity heterogeneity alone cannot adequately explain the observed firm-level patterns in Chinese manufacturing sector. I document that larger firms exhibit lower average revenue productivity, revenue productivity variance is high conditional on firm size, and larger exporters exhibit lower export intensity. Introducing firm-level misallocation can help reconcile these facts and doing so matters for estimating the gains from trade. The misallocation model predicts the size of gains from trade that is 45\% lower than the standard model predicts when both models are calibrated with the same Chinese manufacturing data. The result suggests that accounting for firm level heterogeneity in the dimensions other than productivity is important when estimating the gains from trade. The second chapter, a joint work with Antoine Berthou (Banque de France), Kalina Manova (University College London), and Charlotte Sandoz (IMF), examines the impact of international trade on aggregate welfare and productivity. We show theoretically and numerically that bilateral and unilateral export liberalizations increase aggregate welfare and productivity, while unilateral import liberalization can either raise or reduce them. However, all three trade reforms have ambiguous effects in the presence of resource misallocation across heterogeneous firms. Using unique new data on 14 European countries and 20 manufacturing industries during 1998-2011, we empirically establish that exogenous shocks to both export demand and import competition generate large aggregate productivity gains. We develop a precise mapping between theory and empirics, and provide evidence for the adjustment mechanisms. First, both trade aspects increase average firm productivity, but export expansion also reallocates activity towards more productive firms, while import penetration acts in reverse. Second, both export and import exposure raise the productivity threshold for survival, but the latter is not a summary statistic for aggregate productivity. Finally, efficient institutions, factor and product markets amplify the productivity gains from import competition, but dampen those from export expansion. We conclude that the effects of globalization operate through firm selection and reallocation in the presence of resource misallocation. The third chapter studies the role of production chain on the patterns of international trade. Theory suggests that if producing a final product requires a sequence of production stages, and a mistake occurring at any stage destroys the product, then countries with higher productivity has comparative advantage in later stages of production chain, where the cost of mistake is higher. Despite this prediction, I combine international trade data with country and sector level data to show that more developed countries specialize in earlier stages, once other sources of comparative advantage have been considered. This result suggests that quality control is potentially an important factor in country's specialization along production chains -- when mistakes are imperfectly observed, countries with better ability to observe mistakes would specialize in more upstream sectors.

Download or read book How Large is the Productivity Loss from Misallocation written by hundanol atnafu kebede and published by . This book was released on 2022 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper compares the productivity loss from product and input market distortions across countries and examines how it is influenced by trade using firm-level data from over 70 countries. Three main results emerge. First, productivity loss from misallocation significantly varies across countries and is strongly negatively correlated with GDP per capita. Misallocation could explain about a quarter of cross-country variation in manufacturing productivity. Second, trade openness reduces the productivity loss from misallocation via reducing between-firm dispersion in markup (or TFPR). Third, the productivity loss from a counterfactual import ban significantly differs across countries and is larger in countries with underdeveloped manufacturing sector than countries such as China.

Download or read book Resource Misallocation Among Listed Firms in China The Evolving Role of State Owned Enterprises written by Ms. Emilia M Jurzyk and published by International Monetary Fund. This book was released on 2021-03-12 with total page 45 pages. Available in PDF, EPUB and Kindle. Book excerpt: We document that publicly listed Chinese state-owned enterprises (SOEs) are less productive and profitable than publicly listed firms in which the state has no ownership stake. In particular, Chinese listed SOEs are more capital intensive and have a lower average product of capital than non-SOEs. These productivity differences increased between 2002 and 2009, and remain sizeable in 2019. Using a heterogeneous firm model of resource misallocation, we find that there are large potential productivity gains from reforms which could equalize the marginal products of listed SOEs and listed non-SOEs.

Download or read book Trade Misallocation and Capital Market Integration written by Laszlo Tetenyi and published by . This book was released on 2019 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: I study how cross-country capital market integration affects the gains from trade in a model with financial frictions and heterogeneous, forward-looking firms. The model predicts that misallocation among exporters increases as trade barriers fall, even as misallocation decreases in the aggregate. The reason is that financially constrained productive exporters increase their production only marginally, while unproductive exporters survive for longer and increase their size. Allowing capital inflows magnifies misallocation, because unproductive firms expand even more, leading to a decline in aggregate productivity. Nevertheless, under integrated capital markets, access to cheaper capital dominates the adverse effect on productivity, leading to higher output, consumption and welfare than under closed capital markets. Applied to the period of European integration between 1992 and 2008, I find that underdeveloped sectors experiencing higher export exposure had more misallocation of capital and a higher share of unproductive firms, thus the data is consistent with the model’s predictions. A key implication of the model is that TFP is a poor proxy for consumption growth after trade liberalisation.

Download or read book Essays in International Economics written by Charlotte Sandoz-Dit-Bragard and published by . This book was released on 2018 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: In this dissertation, I contribute to the literature on international economics by drawing attention to the impact of trade flows and structural reforms on productivity growth in the manufacturing sector in Europe and India. ln the first chapter co-authored, with Antoine Berthou, Jong-Chung Chung and Kalina Manova, we demonstrate that growth in exports and imports boosts labor productivity, but only export demand reallocates activity toward more productive firms in presence of price distortions. Moreover, market and institutional frictions dampen the ability of economies to react and gain from trade shocks. ln the second chapter, I show that the increase in Chinese imports of intermediate inputs is a significant driver of aggregate TFP growth in France as it increases efficiency in sharing market shares between firms. Allowing more firms to access intermediate goods at the best price-quality ratio stimulates aggregate productivity growth. ln the third chapter, co-written with Adil Mohommad and Piyapom Sodsriwiboon, our finding suggests that removing structural rigidities in the labor market and improving credit allocation would reduce distortions and contribute to productivity gains and long term growth in India.

Download or read book Barriers to Riches written by Stephen L. Parente and published by MIT Press. This book was released on 2002-01-25 with total page 188 pages. Available in PDF, EPUB and Kindle. Book excerpt: Why isn't the whole world as rich as the United States? Conventional views holds that differences in the share of output invested by countries account for this disparity. Not so, say Stephen Parente and Edward Prescott. In Barriers to Riches, Parente and Prescott argue that differences in Total Factor Productivity (TFP) explain this phenomenon. These differences exist because some countries erect barriers to the efficient use of readily available technology. The purpose of these barriers is to protect industry insiders with vested interests in current production processes from outside competition. Were this protection stopped, rapid TFP growth would follow in the poor countries, and the whole world would soon be rich. Barriers to Riches reflects a decade of research by the authors on this question. Like other books on the subject, it makes use of historical examples and industry studies to illuminate potential explanations for income differences. Unlike these other books, however, it uses aggregate data and general equilibrium models to evaluate the plausibility of alternative explanations. The result of this approach is the most complete and coherent treatment of the subject to date.

Download or read book The Effects of International Trade on Resource Misallocation written by M. Curuk and published by . This book was released on 2011 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Resource Misallocation in India The Role of Cross State Labor Market Reform written by Mr.Adil Mohommad and published by International Monetary Fund. This book was released on 2021-02-26 with total page 34 pages. Available in PDF, EPUB and Kindle. Book excerpt: At the macro level, productivity is driven by technology and the efficiency of resource allocation, as outcomes of firms’ decision making. The relatively high level of resource misallocation in India’s formal manufacturing sector is well documented. We build on this research to further investigate the drivers of misallocation, exploiting micro-level variation across Indian states. We find that states with less rigid labor markets have lesser misallocation. We also examine the interaction of labor market rigidities with informality which is a key feature of India’s labor markets. Our results suggest that reducing labor market rigidities in states with high informality has a net positive effect on aggregate productivity.

Download or read book Misallocation Under Trade Liberalization written by Yan Bai and published by . This book was released on 2019 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper formalizes a classic idea that in second-best environments trade can induce welfare losses. In a framework that incorporates distortion wedges into a Melitz model, we analyze a channel in which trade can reduce allocative efficiency arising from the reallocation of resources. A key aggregate statistics that captures this negative selection is the gap between input and output shares. We derive sufficient conditions for welfare loss due to trade under important distributions. Using Chinese manufacturing data for the period 1998-2007, we show that welfare gains and productivity have qualitatively and quantitatively large departures from those predicted by standard models of trade.

Download or read book Financial Distortions in China written by Diego Anzoategui and published by International Monetary Fund. This book was released on 2015-12-24 with total page 31 pages. Available in PDF, EPUB and Kindle. Book excerpt: Widespread implicit guarantees and interest ceilings were major distortions in China’s financial system, contributing to a misallocation of resources. We analyze the impact of removing such frictions in a general equilibrium setting. The results show that comprehensive reforms generate better outcomes than partial ones: removing the deposit rate ceiling alone increases output, but the efficiency of capital allocation does not improve. Removing implicit guarantees improves output through lower cost of capital for private companies and better resource allocation.

Download or read book The Age of Productivity written by Inter-American Development Bank and published by Springer. This book was released on 2010-04-12 with total page 363 pages. Available in PDF, EPUB and Kindle. Book excerpt: Age of Productivity offers a look at how the low productivity in Latin America and the Caribbean is preventing the region from catching up with the developed world. The authors look beyond the traditional macro explanations and dig all the way down to the industry and firm level to uncover the causes.