Advanced Search
MyIDEAS: Login

Are China and India Backwards? Evidence from the 19th Century U.S. Census of Manufactures

Contents:

Author Info

  • Nicolas Ziebarth

    (Northwestern University)

Registered author(s):

    Abstract

    Hsieh and Klenow (2009) argue that a large fraction of aggregate TFP differences between the U.S. and the developing countries of China and India can be explained by factor misallocation. Their interpretation is that this misallocation is due to institutions and policies in these developing countries that redirect resources from productive to unproductive firms. Using the U.S. Census of Manufactures from the late 19th century, I find that the level of dispersion in these modern, less developed countries is very similar to that in the 19th century U.S. What is similar about the countries is their level of development not the existence of institutions that Hsieh and Klenow (2009) emphasize such as state owned enterprises as in China or entry restrictions as in India. These results suggest that the institutional basis of misallocation potentially goes beyond these overtly distortionary policies. I apply their accounting procedure to the U.S. and find that between 4% and 7% of total manufacturing TFP growth in the 20th century can be attributed to a more efficient intra-industry allocation of resources. I conclude by discussing some other explanations for these results including differences in transportation networks and lack of competitive regulation. (Copyright: Elsevier)

    Download Info

    If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
    File URL: http://dx.doi.org/10.1016/j.red.2012.09.003
    Download Restriction: Access to full texts is restricted to ScienceDirect subscribers and institutional members. See http://www.sciencedirect.com/ for details.

    As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

    Bibliographic Info

    Article provided by Elsevier for the Society for Economic Dynamics in its journal Review of Economic Dynamics.

    Volume (Year): 16 (2013)
    Issue (Month): 1 (January)
    Pages: 86-99

    as in new window
    Handle: RePEc:red:issued:11-35

    Contact details of provider:
    Postal: Review of Economic Dynamics Academic Press Editorial Office 525 "B" Street, Suite 1900 San Diego, CA 92101
    Fax: 1-314-444-8731
    Email:
    Web page: http://www.EconomicDynamics.org/review.htm
    More information through EDIRC

    Order Information:
    Email:
    Web: http://www.EconomicDynamics.org/RED17.htm

    Related research

    Keywords: Productivity; Dispersion; Long-run development;

    Other versions of this item:

    Find related papers by JEL classification:

    References

    References listed on IDEAS
    Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
    as in new window
    1. Ezra Oberfield, 2011. "Productivity and Misallocation During a Crisis," 2011 Meeting Papers 1328, Society for Economic Dynamics.
    2. Amil Petrin & T. Kirk White & Jerome P. Reiter, 2011. "The Impact of Plant-level Resource Reallocations and Technical Progress on U.S. Macroeconomic Growth," NBER Working Papers 16700, National Bureau of Economic Research, Inc.
    3. Joe Peek & Eric S. Rosengren, 2003. "Unnatural Selection: Perverse Incentives and the Misallocation of Credit in Japan," NBER Working Papers 9643, National Bureau of Economic Research, Inc.
    4. Epifani, Paolo & Gancia, Gino A., 2009. "Trade, Markup Heterogeneity and Misallocations," CEPR Discussion Papers 7217, C.E.P.R. Discussion Papers.
    5. Robert E. Hall & Charles I. Jones, 1999. "Why Do Some Countries Produce So Much More Output Per Worker Than Others?," The Quarterly Journal of Economics, MIT Press, vol. 114(1), pages 83-116, February.
    6. V. V. Chari & Patrick J. Kehoe & Ellen R. McGrattan, 2007. "Business Cycle Accounting," Econometrica, Econometric Society, vol. 75(3), pages 781-836, 05.
    7. David E. Weinstein & Christian Broda, 2004. "Globalization And The Gains From Variety," Econometric Society 2004 Latin American Meetings 327, Econometric Society.
    8. Dave Donaldson & Richard Hornbeck, 2013. "Railroads and American Economic Growth: A “Market Access” Approach," NBER Working Papers 19213, National Bureau of Economic Research, Inc.
    9. Chris Edmond & Virgiliu Midrigan & Daniel Yi Xu, 2012. "Competition, Markups, and the Gains from International Trade," NBER Working Papers 18041, National Bureau of Economic Research, Inc.
    10. Xu Yi & Nezih Guner & Gustavo Ventura, 2005. "Macroeconomic Implications of Size Dependent Policies," 2005 Meeting Papers 530, Society for Economic Dynamics.
    11. Abhijit Banerjee & Kaivan Munshi, 2004. "How Efficiently is Capital Allocated? Evidence from the Knitted Garment Industry in Tirupur," Review of Economic Studies, Oxford University Press, vol. 71(1), pages 19-42.
    12. Chang-Tai Hsieh & Peter J. Klenow, 2009. "Misallocation and Manufacturing TFP in China and India," The Quarterly Journal of Economics, MIT Press, vol. 124(4), pages 1403-1448, November.
    13. Anne O. Krueger & Jungho Yoo, 2002. "Chaebol Capitalism and the Currency-Financial Crisis in Korea," NBER Chapters, in: Preventing Currency Crises in Emerging Markets, pages 601-662 National Bureau of Economic Research, Inc.
    14. Lucia Foster & John Haltiwanger & Chad Syverson, 2005. "Reallocation, Firm Turnover, and Efficiency: Selection on Productivity or Profitability?," NBER Working Papers 11555, National Bureau of Economic Research, Inc.
    15. Song, Zheng Michael & Storesletten, Kjetil & Zilibotti, Fabrizio, 2009. "Growing like China," CEPR Discussion Papers 7149, C.E.P.R. Discussion Papers.
    16. Jeremy Atack & Michael R. Haines & Robert A. Margo, 2008. "Railroads and the Rise of the Factory: Evidence for the United States, 1850-70," NBER Working Papers 14410, National Bureau of Economic Research, Inc.
    17. Abhijit Banerjee & Esther Duflo & Nancy Qian, 2012. "On the Road: Access to Transportation Infrastructure and Economic Growth in China," Working Papers id:4826, eSocialSciences.
    18. Atack, Jeremy & Bateman, Fred & Margo, Robert A., 2004. "Skill Intensity and Rising Wage Dispersion in Nineteenth-Century American Manufacturing," The Journal of Economic History, Cambridge University Press, vol. 64(01), pages 172-192, March.
    19. O'Brien, Anthony Patrick, 1988. "Factory size, economies of scale, and the great merger wave of 1898–1902," The Journal of Economic History, Cambridge University Press, vol. 48(03), pages 639-649, September.
    20. Diego Restuccia & Dennis Tao Yang & Xiaodong Zhu, 2003. "Agriculture and Aggregate Productivity: A Quantitative Cross-Country Analysis," Working Papers diegor-03-01, University of Toronto, Department of Economics.
    21. Ricardo Lagos, 2006. "A model of TFP," Staff Report 345, Federal Reserve Bank of Minneapolis.
    22. Chang-Tai Hsieh & Peter J. Klenow, 2010. "Development Accounting," American Economic Journal: Macroeconomics, American Economic Association, vol. 2(1), pages 207-23, January.
    23. Atack, Jeremy, 1986. "Firm Size and Industrial Structure in the United States During the Nineteenth Century," The Journal of Economic History, Cambridge University Press, vol. 46(02), pages 463-475, June.
    24. North, Douglass C., 1989. "Institutions and economic growth: An historical introduction," World Development, Elsevier, vol. 17(9), pages 1319-1332, September.
    25. Igal Hendel & Aviv Nevo, 2005. "Measuring the Implications of Sales and Consumer Inventory Behavior," NBER Working Papers 11307, National Bureau of Economic Research, Inc.
    26. William Hutchinson & Robert A. Margo, 2004. "The Impact of the Civil War on Capital Intensity and Labor Productivity in Southern Manufacturing," NBER Working Papers 10886, National Bureau of Economic Research, Inc.
    27. Wright, Gavin, 1979. "Cheap Labor and Southern Textiles before 1880," The Journal of Economic History, Cambridge University Press, vol. 39(03), pages 655-680, September.
    28. Michael Peters, 2011. "Heterogeneous Mark-Ups and Endogenous Misallocation," 2011 Meeting Papers 78, Society for Economic Dynamics.
    29. Howard Bodenhorn & Hugh Rockoff, 1992. "Regional Interest Rates in Antebellum America," NBER Chapters, in: Strategic Factors in Nineteenth Century American Economic History: A Volume to Honor Robert W. Fogel, pages 159-187 National Bureau of Economic Research, Inc.
    30. Wright, Gavin, 1981. "Cheap Labor and Southern Textiles, 1880-1930," The Quarterly Journal of Economics, MIT Press, vol. 96(4), pages 605-29, November.
    31. Christopher Candelaria & Mary Daly & Galina Hale, 2009. "Beyond Kuznets: persistent regional inequality in China," Working Paper Series 2009-07, Federal Reserve Bank of San Francisco.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as in new window

    Cited by:
    1. Flora Bellone & Jérémy Mallen-Pisano, 2013. "Is Misallocation Higher in France than in the United States?," GREDEG Working Papers 2013-38, Groupe de REcherche en Droit, Economie, Gestion (GREDEG CNRS), University of Nice Sophia Antipolis.

    Lists

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    Statistics

    Access and download statistics

    Corrections

    When requesting a correction, please mention this item's handle: RePEc:red:issued:11-35. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Christian Zimmermann).

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.