@techreport{Bartelsman2009Cross,
abstract = {This paper combines different strands of the productivity literature to investigate the effect of idiosyncratic (firm-level) policy distortions on aggregate outcomes. On the one hand, a growing body of empirical research has been relating cross-country differences in key economic outcomes, such as productivity or output per capita, to differences in policies and institutions that shape the business environment. On the other hand, a branch of empirical research has attempted to shed light on the determinants of productivity at the firm-level and the evolution of the distribution of productivity across firms within each industry. In this paper, we exploit a rich source of data with harmonized statistics on firm level variation within industries for a number of countries. Our key empirical finding is that there is substantial variation in the within-industry covariance between size and productivity across countries, and this variation is affected by the presence of idiosyncratic distortions. We develop a model in which heterogeneous firms face adjustment frictions (overhead labor and quasi-fixed capital) and idiosyncratic distortions. We show that the model can be readily calibrated to match the observed cross-country patterns of the within-industry covariance between productivity and size and thus help to explain the observed differences in aggregate performance.},
address = {Bonn},
author = {Eric J. Bartelsman and John Haltiwanger and Stefano Scarpetta},
copyright = {http://www.econstor.eu/dspace/Nutzungsbedingungen},
keywords = {E02; L11; L16; L2; L25; O4; O57; 330; Firm heterogeneity; productivity; allocation of resources; distortions; Unternehmensentwicklung; Produktivit\"{a}t; Wirtschaftspolitik; Allokation; Wirkungsanalyse; Welt},
language = {eng},
number = {4578},
publisher = {IZA},
title = {Cross-country differences in productivity: the role of allocation and selection},
type = {IZA Discussion Papers},
url = {http://hdl.handle.net/10419/36105},
year = {2009}
}
