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Growth of the Korean economy has been sluggish, and this situation is more pronounced in the service sector. We argue that capital misallocation, especially in the service sector, could contribute to this slowdown. Utilizing firm and sectoral level data, first we assess the rising dispersion of...
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to a sectoral reallocation of employment from manufacturing to services, leaving total employment unaffected. We …
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Financial frictions distort the allocation of resources among productive units--all else equal, firms whose financing …
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