IDEAS home Printed from https://ideas.repec.org/a/aea/aejmac/v18y2026i3p413-54.html

Resource Misallocation in European Firms: The Role of Constraints, Firm Characteristics, and Managerial Decisions

Author

Listed:
  • Yuriy Gorodnichenko
  • Debora Revoltella
  • Jan Svejnar
  • Christoph T. Weiss

Abstract

Using a new survey, we document high dispersion of marginal revenue products across firms in the European Union. To interpret this dispersion, we develop a highly portable framework to quantify gains from better allocation of resources. We demonstrate that apart from direct measures of distortions, firm characteristics, such as demographics, quality of inputs, utilization of resources, and dynamic adjustment of inputs, are predictors of the marginal revenue products of capital and labor. We emphasize that some firm characteristics may reflect compensating differentials rather than constraints and the effect of constraints on the dispersion of marginal products maybe smaller.

Suggested Citation

  • Yuriy Gorodnichenko & Debora Revoltella & Jan Svejnar & Christoph T. Weiss, 2026. "Resource Misallocation in European Firms: The Role of Constraints, Firm Characteristics, and Managerial Decisions," American Economic Journal: Macroeconomics, American Economic Association, vol. 18(3), pages 413-454, July.
    • Handle: RePEc:aea:aejmac:v:18:y:2026:i:3:p:413-54
    DOI: 10.1257/mac.20210220
    as

    Download full text from publisher

    File URL: https://www.aeaweb.org/doi/10.1257/mac.20210220
    Download Restriction: Access to full text is restricted to AEA members and institutional subscribers.
    File URL: https://doi.org/10.3886/E226724V1
    Download Restriction: no
    File URL: https://www.aeaweb.org/articles/materials/25603
    Download Restriction: no
    File URL: https://www.aeaweb.org/articles/materials/25604
    Download Restriction: no
    File URL: https://libkey.io/10.1257/mac.20210220?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to

    for a different version of it.

    More about this item

    JEL classification:

    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • D25 - Microeconomics - - Production and Organizations - - - Intertemporal Firm Choice: Investment, Capacity, and Financing
    • E23 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Production
    • G31 - Financial Economics - - Corporate Finance and Governance - - - Capital Budgeting; Fixed Investment and Inventory Studies
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance

    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:aea:aejmac:v:18:y:2026:i:3:p:413-54. 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: Michael P. Albert (email available below). General contact details of provider: https://edirc.repec.org/data/aeaaaea.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.