Resource misallocation can lower aggregate total factor productivity (TFP). We use micro data on manufacturing … establishments to quantify the potential extent of misallocation in China and India compared to the U.S. Compared to the U.S., we … measure sizable gaps in marginal products of labor and capital across plants within narrowly-defined industries in China and …

reflect misallocation which hinders aggregate productivity. But differences in measured average products need not reflect …

aggregate manufacturing productivity on the order of 25% in India and Mexico relative to the U.S …