Firm heterogeneity and the allocation of resources across firms play a key role in determining aggregate productivity …. Entry barriers and misallocation can substantially impact productivity, as evidenced in recent work. This article provides a …

Misallocation of resources across firms leads to lower aggregate productivity. In this paper, we provide new estimates … of manufacturing productivity differences across countries and establish by how much they would be reduced if such … show that manufacturing productivity would increase by an average of 62 percent, but productivity gaps relative to the US …