IDEAS home Printed from https://ideas.repec.org/p/tcb/wpaper/1918.html
   My bibliography  Save this paper

A Trade-Based Misallocation Index

Author

Listed:
  • Orhun Sevinc

Abstract

This paper, based on a model of trade in the presence of sectoral distortions, develops a one dimensional sectoral misallocation index. It estimates the index using product-level bilateral trade data at the sector-country-year level since 1962. The geographical distribution of the misallocation index suggests substantial within-region differences across countries and across time. Notably, a large and historical allocative efficiency gap exists across the West and the East of Europe, while the latter shows a remarkable progress in catching up. On the other hand, the substantial gap between the North and South America is highly persistent. The paper then investigates the negative association of misallocation to economic performance through multivariate regression analysis. The index of misallocation inversely and robustly predicts cross-country productivity differences, contains valuable information on top of factors of production, and outperforms measures of diversification, product sophistication, and openness when time invariant country characteristics are accounted for.

Suggested Citation

  • Orhun Sevinc, 2019. "A Trade-Based Misallocation Index," Working Papers 1918, Research and Monetary Policy Department, Central Bank of the Republic of Turkey.
    • Handle: RePEc:tcb:wpaper:1918
    as

    Download full text from publisher

    File URL: https://www.tcmb.gov.tr/wps/wcm/connect/EN/TCMB+EN/Main+Menu/Publications/Research/Working+Paperss/2019/19-18
    Download Restriction: no
    ---><---

    More about this item

    Keywords

    Trade; Misallocation; Comparative advantage;
    All these keywords.

    JEL classification:

    • F10 - International Economics - - Trade - - - General
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General

    NEP fields

    This paper has been announced in the following NEP Reports:

    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:tcb:wpaper:1918. 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: Sermet Pekin or Ilker Cakar or the person in charge (email available below). General contact details of provider: https://edirc.repec.org/data/tcmgvtr.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.