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Resource misallocation and manufacturing productivity: The case of Ukraine

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  • Ryzhenkov, Mykola

Abstract

Applying Hsieh and Klenow (2009) methodology, and using the dataset of 47,497 unique establishments over the period of 2002–2010, I investigate the effects of resource misallocation on the productivity of Ukrainian manufacturing. Empirical results show that there is a significant resource misallocation in Ukrainian manufacturing. If it were the case that all market distortions were eliminated, manufacturing productivity could triple, whereas if Ukraine was as distorted as the US or EU, it could be twice more productive than it is now. The results also show that most enterprises should downsize their level of production and that the major reallocations of resources occur among the most and the least productive enterprises.

Suggested Citation

  • Ryzhenkov, Mykola, 2016. "Resource misallocation and manufacturing productivity: The case of Ukraine," Journal of Comparative Economics, Elsevier, vol. 44(1), pages 41-55.
    • Handle: RePEc:eee:jcecon:v:44:y:2016:i:1:p:41-55
    DOI: 10.1016/j.jce.2015.12.003
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    More about this item

    JEL classification:

    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis
    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • O52 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Europe

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