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This paper complements the results of earlier work on factor misallocation. The paper first expands the methodology and provides two important decompositions for the main indices. The main result is that factor and output misallocation across districts is at least as important as misallocation...
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Resource misallocation can lower the aggregate total factor productivity (TFP). We use micro-data on manufacturing … establishments from the Instituto Ecuatoriano de Estadística y Censos to quantify the differences in productivity and diagnose the … efficiency in the allocation of resources between formal and informal firms in the Ecuadorian in the manufacturing sector. We use …
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Economy-wide institutional deficiencies causing factor misallocation have been emphasized as essential determinants of aggregate TFP differences. This paper argues that production flexibility at the micro-level is an economic characteristic that should be given priority in TFP aggregation...
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