Productivity and misallocation during a crisis: Evidence from the Chilean crisis of 1982

Oberfield, Ezra

doi:10.1016/j.red.2012.10.005

Cited by 100 publications

(83 citation statements)

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“…Our paper contributes to a recent body of work that studies the dynamics of dispersion and misallocation. Oberfield (2013) and Sandleris and Wright (2014) document the evolution of misallocation during crises in Chile and Argentina respectively. Larrain and Stumpner (2013) document changes in resource allocation in several Eastern European countries during financial market liberalization episodes.…”

Section: We Use a Firm-level Dataset From Orbis-amadeus That Covers Mmentioning

confidence: 99%

Capital Allocation and Productivity in South Europe

Gopinath¹,

et al. 2015

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Starting in the early 1990s, countries in southern Europe experienced low productivity growth alongside declining real interest rates. We use data for manufacturing firms in Spain between 1999 and 2012 to document a significant increase in the dispersion of the return to capital across firms, a stable dispersion of the return to labor, and a significant increase in productivity losses from capital misallocation over time. We develop a model with size-dependent financial frictions that is consistent with important aspects of firms' behavior in production and balance sheet data. We illustrate how the decline in the real interest rate, often attributed to the euro convergence process, leads to a significant decline in sectoral total factor productivity as capital inflows are misallocated toward firms that have higher net worth but are not necessarily more productive. We show that similar trends in dispersion and productivity losses are observed in Italy and Portugal but not in Germany, France, and Norway.

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Section: We Use a Firm-level Dataset From Orbis-amadeus That Covers Mmentioning

confidence: 99%

Capital Allocation and Productivity in South Europe

Gopinath¹,

et al. 2015

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“…2 Moreover, our evidences obtained here are bigger than other developing economies (Hsieh and Klenow (2009) checked that if China and India could optimally allocate their inputs, the manufacturing sector of these economies would grow by 30-50% and 40-60%, respectively; Oberfield (2013) found that this same type of reallocation in Chile implied a growth of 60%). This works and can help to understand the persistence of the differences in output per capita between countries.…”

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confidence: 58%

“…However, depending on the crisis and the policy adopted, a growth in the misallocation of resources can occur, because relative prices can be distorted in this situation (Oberfield, 2013). Some the counter-cyclical polices, for example, an asymmetrical increase in taxes or subsidies among sectors, changes the relative prices and affects the product and income structure.…”

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confidence: 99%

Misallocation in the Brazilian Manufacturing Sector

Vasconcelos

2017

Brazilian Review of Econometrics

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This work investigates the existence of resource misallocation in the Brazilian manufacturing sector and measures possible distortions in it. Using a similar method of measurement to the one developed by Hsieh and Klenow (2009) and firm-level data for 1996-2011 we find evidence of misallocation in the manufacturing sector during the observed period. Our results show that misallocation has been growing since 2005. We find that the Brazilian manufacturing sector operates at about 50% of its efficient product. We also find that the economic crisis did not have a substantial effect on the total productivity factor or on the sector's misallocation. However, small firms in particular seem to be strongly affected in a global crisis. Furthermore, the measured effects are smaller when we consider the network effects. Despite Brazil's well-known high tax burden, there is not evidence that this is the main source of resource misallocation.

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“…3 Within this literature, some papers are interested in understanding the consequences of financial crises on output and productivity (see, for example, Benjamin and Meza (2009), Sandleris and Wright (2011), Hallward-Driemeier and Rijkers (2011), Chen and Irarrazabal (2013, and Oberfield (2013)). These papers tend to find that during a crisis, relatively more productive firms will exit but at the same time, entering firms are more productive.…”

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confidence: 99%

“…As Oberfield (2013) notes, the most prominent measurement issue is that capital is notoriously difficult to measure and the extent of misallocation may be overstated if capital is poorly measured. Some papers use energy consumption under the assumption that capital services require fixed proportions of energy and capital (see, for instance, Oberfield (2013) and Sandleris and Wright (2011)).…”

mentioning

confidence: 99%