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Misallocation and Aggregate Productivity across Time and Space

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  • Diego Restuccia
Abstract
Productivity is at the core of the large differences in income per capita across countries. What accounts for international productivity differences? I discuss cross-country differences in the allocation of inputs across heterogeneous production units-misallocation-as a potential factor in accounting for aggregate productivity. Policies and institutions generating misallocation are prevalent in poor and developing countries and may also be responsible for differences in the selection of operating producers and technology used, contributing substantially to aggregate productivity differences across countries.

Suggested Citation

  • Diego Restuccia, 2018. "Misallocation and Aggregate Productivity across Time and Space," Working Papers tecipa-608, University of Toronto, Department of Economics.
    • Handle: RePEc:tor:tecipa:tecipa-608
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    References listed on IDEAS

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    Cited by:

    1. Marijn A. Bolhuis & Swapnika R. Rachapalli & Diego Restuccia, 2021. "Misallocation in Indian Agriculture," NBER Working Papers 29363, National Bureau of Economic Research, Inc.
    2. Misch, Florian & Saborowski, Christian, 2020. "The drivers and consequences of resource misallocation: exploiting variation across Mexican industries and states," LSE Research Online Documents on Economics 123325, London School of Economics and Political Science, LSE Library.
    3. Tasso Adam & Loren Brandt & Chaoran Chen & Diego Restuccia & Xiaoyun Wei, 2024. "Land Security and Mobility Frictions," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 139(3), pages 1941-1987.
    4. Chen, Guowen & Herrera, Ana María & Lugauer, Steven, 2022. "Policy and misallocation: Evidence from Chinese firm-level data," European Economic Review, Elsevier, vol. 149(C).
    5. Stephen Ayerst & Duc M. Nguyen & Diego Restuccia, 2024. "The Micro and Macro Productivity of Nations," NBER Working Papers 32750, National Bureau of Economic Research, Inc.
    6. Wenqin Yan & Dongsheng Yan, 2023. "The Regional Effect of Land Transfer on Green Total Factor Productivity in the Yangtze River Delta: A Spatial Econometric Investigation," Land, MDPI, vol. 12(9), pages 1-18, September.
    7. Yidan Liang, 2023. "The effect of capital and labour distortion on innovation," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 63(2), pages 1709-1737, June.

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    More about this item

    Keywords

    productivity; misallocation; selection; technology; regulation; trade; financial frictions; agriculture.;
    All these keywords.

    JEL classification:

    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
    • O4 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity

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