Misallocation and Manufacturing TFP in China and India*

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ID: 289877
2009
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Abstract
Resource misallocation can lower aggregate total factor productivity (TFP). We use microdata on manufacturing establishments to quantify the potential extent of misallocation in China and India versus the United States. We measure sizable gaps in marginal products of labor and capital across plants within narrowly defined industries in China and India compared with the United States. When capital and labor are hypothetically reallocated to equalize marginal products to the extent observed in the United States, we calculate manufacturing TFP gains of 30%–50% in China and 40%–60%.in India.
Reference Key
openalex_W2753335427 Use this key to autocite in the manuscript while using SciMatic Manuscript Manager or Thesis Manager
Authors Chang‐Tai Hsieh, Peter J. Klenow
Journal the quarterly journal of economics
Year 2009
DOI
10.1162/qjec.2009.124.4.1403
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