Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/237478 
Year of Publication: 
2021
Series/Report no.: 
IDB Working Paper Series No. IDB-WP-1191
Publisher: 
Inter-American Development Bank (IDB), Washington, DC
Abstract: 
We measure the contribution of firm-embedded productivity to cross-country income differences. By firm-embedded productivity we refer to the components of productivity that differ across firms and that can be transferred internationally, such as blueprints, management practices, and intangible capital. Our approach relies on micro-level data on the cross-border operations of multinational enterprises (MNEs). We compare the market shares of the exact same MNE in different countries and document that they are about four times larger in developing than in high-income coun-tries. This finding indicates that MNEs face less competition in less-developed coun-tries, suggesting that firm-embedded productivity in those countries is scarce. We propose and implement a new measure of firm-embedded productivity based on this observation. We find a strong positive correlation between our measure and output per worker across countries. In our sample, differences in firm-embedded productivity account for roughly a third of the cross-country variance in output per worker.
Subjects: 
Development Accounting
TFP
Multinational Enterprises
JEL: 
O4
O1
F41
F23
F62
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by-nc-nd Logo
Document Type: 
Working Paper

Files in This Item:
File
Size





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.