Misallocation and Manufacturing TFP in China and India
February 2009
Working Paper Number:
CES-09-04
Abstract
Resource misallocation can lower aggregate total factor productivity (TFP). We use micro data on manufacturing establishments to quantify the potential extent of misallocation in China and India compared to the U.S. Compared to the U.S., we measure sizable gaps in marginal products of labor and capital across plants within narrowly-defined industries in China and India. When capital and labor are hypothetically reallocated to equalize marginal products to the extent observed in the U.S., we calculate manufacturing TFP gains of 30-50% in China and 40-60% in India.
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text, highlighting the most significant topics and trends. This approach not only enhances searchability but
provides connections that go beyond potentially domain-specific author-defined keywords.
:
production,
profitability,
industrial,
manufacturing,
growth,
earnings,
industry productivity,
produce,
factor productivity,
sector,
efficient,
efficiency,
factory,
expenditure,
sectoral,
wages productivity,
industry concentration,
manufacturing industries,
indian,
aggregate productivity,
industry output
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:
Census of Manufactures,
Annual Survey of Manufactures,
Center for Economic Studies,
Total Factor Productivity,
Cobb-Douglas,
National Income and Product Accounts,
Census of Manufacturing Firms,
Social Security,
Research Data Center,
Alfred P Sloan Foundation,
UC Berkeley,
Special Sworn Status,
TFPR,
TFPQ,
Kauffman Foundation,
International Standard Industrial Classification,
Administrative Records
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