IDEAS home Printed from https://ideas.repec.org/p/red/sed009/223.html
   My bibliography  Save this paper

Accounting for Plant-level Misallocation

Author

Listed:
  • Daniel Yi Xu

    (New York University)

  • Virgiliu Midrigan

    (New York University)

Abstract

Using a micro-level dataset of all Korean manufacturing plants, we show that dispersion in the average product of capital are 1) volatile and persistent at the plant-level, 2) small at the industry-level (2- and 5-digit industries), and 3) systematically related to the size and age of a plant. Using a model of industry dynamics calibrated to match salient facts on plant-level investment, exit and growth, we find that non-convex capital adjustment costs account for a small fraction (less than 3%) of the observed dispersion in the average product of capital. In contrast, borrowing frictions account for a substantial fraction of the observed dispersion in the average product of capital. We also document the extent to which measurement issues (overhead labor, variable capacity utilization, departures from a Cobb-Douglas production function) can generate some of the observed dispersion in the average revenue product of capital.

Suggested Citation

  • Daniel Yi Xu & Virgiliu Midrigan, 2009. "Accounting for Plant-level Misallocation," 2009 Meeting Papers 223, Society for Economic Dynamics.
    • Handle: RePEc:red:sed009:223
    as

    Download full text from publisher

    To our knowledge, this item is not available for download. To find whether it is available, there are three options:
    1. Check below whether another version of this item is available online.
    2. Check on the provider's web page whether it is in fact available.
    3. Perform a search for a similarly titled item that would be available.

    Citations

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


    Cited by:

    1. Nicolas Roys, 2010. "Estimating Labor Market Rigidities with Heterogeneous Firms," 2010 Meeting Papers 127, Society for Economic Dynamics.
    2. Julieta Caunedo, 2017. "Efficiency with Equilibrium Marginal Product Dispersion and Firm Selection," 2017 Meeting Papers 1541, Society for Economic Dynamics.
    3. Devesh Raval, 2011. "Beyond Cobb-Douglas: Estimation of a CES Production Function with Factor Augmenting Technology," Working Papers 11-05, Center for Economic Studies, U.S. Census Bureau.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:red:sed009:223. See general information about how to correct material in RePEc.

    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.

    We have no bibliographic references for this item. You can help adding them by using 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 RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Christian Zimmermann (email available below). General contact details of provider: https://edirc.repec.org/data/sedddea.html .

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

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.