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Resource misallocation and total factor productivity: Manufacturing firms in South Africa

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  • Carol Newman
  • John Rand
  • Mpho Tsebe

Abstract

Misallocation of labour and capital can greatly reduce aggregate productivity. In this study, we use tax administrative data to examine the extent of resource misallocation in the South African context. In addition, we zoom in on how different government incentives affect the allocation (or misallocation) of capital and labour across firms, and we quantify the extent to which alleviating these policy-induced distortions would improve productivity for the manufacturing sector in South Africa.

Suggested Citation

  • Carol Newman & John Rand & Mpho Tsebe, 2019. "Resource misallocation and total factor productivity: Manufacturing firms in South Africa," WIDER Working Paper Series wp-2019-46, World Institute for Development Economic Research (UNU-WIDER).
  • Handle: RePEc:unu:wpaper:wp-2019-46
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    References listed on IDEAS

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    Keywords

    resource misallocation; Productivity;

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