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Title:Distortions, endogenous managerial skills and productivity differences PDF Logo
Authors:Bhattacharya, Dhritiman
Guner, Nezih
Ventura, Gustavo
Issue Date:2011
Series/Report no.:Discussion paper series // Forschungsinstitut zur Zukunft der Arbeit 5963
Abstract:We develop a span-of-control model where managerial skills are endogenous and the outcome of investments over the life cycle of managers. We calibrate this model to U.S plant-size data to quantify the effects of distortions that are correlated with the size of production units. These distortions lead to sharp reductions in plant productivity and the fraction of employment in large plants, with a quantitatively important role for managerial investments. We find that the model can account quite well for properties of Japanese size-distribution data, with a model-implied TFP of about 83% of the U.S. Distortions are critical in accounting for the differences in size distribution between the U.S. and Japan.
Subjects:distortions
size
skill investments
productivity differences
JEL:O40
E23
Persistent Identifier of the first edition:urn:nbn:de:101:1-201110053372
Document Type:Working Paper
Appears in Collections:IZA Discussion Papers, Forschungsinstitut zur Zukunft der Arbeit (IZA)

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