We study the relationship between economic distortions and the size distribution of plants using comparable plant-level data across 104 developing countries. Our main result is to show that, other things equal, countries with larger economic distortions allocate more labor to small unproductive...

Economies have markedly different firm size distributions. At the same time, firms of different size grow differently after identical financial- and product-market liberalization reforms. Thus, identical reforms can produce different growth outcomes across countries. This result is reached after...

Factor misallocation has been emphasized as one of the main sources of differences in aggregate TFP. This paper investigates the empirical dynamics of both capital and labor misallocation. Exploiting a balanced firm-level panel dataset covering manufacturing and services industries in several...

With non-homothetic preferences, a monopolistic competition equilibrium is inefficient. In a setting with heterogeneous firms that charge variable markups, this paper finds a sufficient statistic for changes in allocative efficiency that can be directly measured with data. The model also...

This paper argues that regional variation in the efficiency of labor allocation among German manufacturing plants plays a critical role in explaining regional disparities in productivity. In fact, we show that over 50% of the East-West productivity gap is associated with a less efficient labor...

Productivity convergence among countries has been investigated extensively with mixed results. This paper extends the analysis to the firm level to shed light on the debate of convergence or non-convergence. We find productivity convergence among firms widely in Japan, in both manufacturing...

The Capitalia sample survey of manufacturing firms in Italy represents a potentially important source of panel data on Italian firms. To date 8 waves have been released the most recent of which takes the survey upto the year 2000. In each wave, data is collected for a three year period and...

Direct public support for business R&D is a well-established remedy to market failures, yet empirical evidence on its effectiveness yields conflicting results. The paper investigates the impact of the first European public R&D grant program targeting small and medium enterprises (i.e. the SME...

Subsidies to the Norwegian high-tech industries have traditionally been given as "matching grants", i.e. the subsidies are targeted, and the firms have to contribute a 50 % own risk capital to the subsidized projects. Our results suggest that grants do not crowd out privately financed R&D, but...

We model how R&D enters the innovation system in four ways (intramural, extramural, cooperative, and spillover). Despite measuring three different spillovers together, for a very large sample of European enterprises we conclude that the productivity effects of spillovers were at best smaller...