Productivity and resource misallocation in Latin America1)

By Matias Busso, L. Madrigal, Carmen Pagés. 2012

141 citations recorded by the source corpus.

Abstract Total factor productivity (TFP) in Latin America has declined relative to the US since the mid-1970s. This paper applies a comparable methodology to firm-level data of ten Latin American countries to quantify the heterogeneity of firm productivity and the extent to which resource misallocation can explain lower aggregate TFP. In general, productivity heterogeneity and resource misallocation are found to be much larger than in the US. Achieving an efficient allocation of resources could boost manufacturing TFP between 41% and 122% depending on the countries and years considered. We also find that difficulty in access to capital and restrictive labor regulations explain distortions faced by firms.

Subfields: Economics and Econometrics

View Paper: https://www.semanticscholar.org/paper/f70a48412dcc533bcb965fa52a87bf3c9e00cee0

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In Economics and Econometrics

1. C. Richmond
2. Daniel A. Dias
3. C. R. Marques
4. Scott Roger
5. M. Stone

Citations in the corpus

• Misallocation and Productivity in the Lead Up to the Eurozone Crisis (2016, background): “…efficiency improves with a reduction in the cross-sectional dispersion of output distortions.4 3See, for instance, Chen and Irarrazabal (2013) for Chile, Machicado and Birbuet (2012) for Bolivia, Camacho and Conover (2010) for Colombia, and Busso et al. (2012) for some Latin America countries.”