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Is Misallocation Higher in France than in the United States?

  • Flora Bellone

    University of Nice-Sophia Antipolis, France)

  • Jérémy Mallen-Pisano

    University of Nice-Sophia Antipolis, France)

In this paper, we apply the Hsieh and Klenow (2009) methodology to French microdata on manufacturing firms to quantify the potential extent of intra-industry misallocation in France versus the United States. In contrast to what has been found for developing countries, such as China, India and some countries in Latin America, we do not find any sizeable ”efficiency gap” between France and the U.S. in the manufacturing industry. This new evidence is robust to a series of tests addressing both measurement and specification issues. In light of recent advances in the fields of productivity and misallocation, and in particular Bartelsman et al. (2013), we also discuss to what extent our new empirical findings challenge the established view on which continental European economies have higher input and output distortions than the American economy.

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Paper provided by Groupe de REcherche en Droit, Economie, Gestion (GREDEG CNRS), University of Nice Sophia Antipolis in its series GREDEG Working Papers with number 2013-38.

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Length: 28 pages
Date of creation: Oct 2013
Date of revision:
Handle: RePEc:gre:wpaper:2013-38
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  1. 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.
  2. Kiyohiko G. Nishimura & Takanobu Nakajima & Kozo Kiyota, 2003. "Does Natural Selection Mechanism Still Work in Severe Recessions? --]Examination of the Japanese Economy in the 1990s ---," CIRJE F-Series CIRJE-F-222, CIRJE, Faculty of Economics, University of Tokyo.
  3. Scarpetta, Stefano & Fally, Thibault & Aghion, Philippe, 2007. "Credit Constraints as a Barrier to the Entry and Post-Entry Growth of Firms," Scholarly Articles 4554208, Harvard University Department of Economics.
  4. Diego Restuccia & Richard Rogerson, 2012. "Misallocation and Productivity," Working Papers tecipa-468, University of Toronto, Department of Economics.
  5. Nicholas Crafts, 2006. "Regulation and Productivity Performance," Oxford Review of Economic Policy, Oxford University Press, vol. 22(2), pages 186-202, Summer.
  6. Flora Bellone & Kozo Kiyota & Toshiyuki Matsuura & Patrick Musso & Lionel Nesta, 2012. "International Productivity Gaps and the Export Status of Firms: Evidence from France and Japan," GREDEG Working Papers 2012-07, Groupe de REcherche en Droit, Economie, Gestion (GREDEG CNRS), University of Nice Sophia Antipolis, revised Jan 2014.
  7. Adriana Camacho & Emily Conover, 2010. "Misallocation and Productivity in Colombia's Manufacturing Industries," IDB Publications (Working Papers) 6783, Inter-American Development Bank.
  8. Dani Rodrik, 2013. "Unconditional Convergence in Manufacturing," The Quarterly Journal of Economics, Oxford University Press, vol. 128(1), pages 165-204.
  9. Flora Bellone & Patrick Musso & Lionel Nesta & Michel Qu�r�, 2008. "Market selection along the firm life cycle," Industrial and Corporate Change, Oxford University Press, vol. 17(4), pages 753-777, August.
  10. Casacuberta, Carlos & Gandelman, Nestor, 2006. "Protection, openness, and factor adjustment : evidence from the manufacturing sector in Uruguay," Policy Research Working Paper Series 3891, The World Bank.
  11. G. Steven Olley & Ariel Pakes, 1992. "The Dynamics of Productivity in the Telecommunications Equipment Industry," NBER Working Papers 3977, National Bureau of Economic Research, Inc.
  12. Anita Wölfl & Isabelle Wanner & Tomasz Koźluk & Giuseppe Nicoletti, 2009. "Ten Years of Product Market Reform in OECD Countries: Insights from a Revised PMR Indicator," OECD Economics Department Working Papers 695, OECD Publishing.
  13. Nicolas Ziebarth, 2013. "Are China and India Backwards? Evidence from the 19th Century U.S. Census of Manufactures," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 16(1), pages 86-99, January.
  14. Pablo Andrés Neumeyer & Guido Sandleris, 2010. "Understanding Productivity During the Argentine Crisis," Business School Working Papers 2010-04, Universidad Torcuato Di Tella.
  15. Mary O'Mahony & Marcel P. Timmer, 2009. "Output, Input and Productivity Measures at the Industry Level: The EU KLEMS Database," Economic Journal, Royal Economic Society, vol. 119(538), pages F374-F403, 06.
  16. Bart van Ark & Mary O'Mahoney & Marcel P. Timmer, 2008. "The Productivity Gap between Europe and the United States: Trends and Causes," Journal of Economic Perspectives, American Economic Association, vol. 22(1), pages 25-44, Winter.
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