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Barriers to global capital allocation
Pellegrino, Bruno; Spolaore, Enrico; Wacziarg, Romain - 2024
reconcile with frictionless capital markets. In this paper, we develop a theory of international capital allocation: a multi … reduce world output by almost 7% and account for nearly half of the observed cross-country differences in capital stock per …
Persistent link: https://www.econbiz.de/10015070015
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Rise of Superstar Firms and Fall of the Price Mechanism
Su, Dan - 2021
through the lens of an endogenous firm-market boundary. Empirically I find that since the 1980s, capital allocation efficiency …
Persistent link: https://www.econbiz.de/10013246534
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Barriers to global capital allocation
Pellegrino, Bruno; Spolaore, Enrico; Wacziarg, Romain - 2021
benchmark calibration, we estimate that the capital misallocation induced by these barriers reduces World GDP by 7%, compared to … a situation without barriers. We also find that barriers to global capital allocation contribute significantly to cross …-country inequality: the standard deviation of log capital per employee is 80% higher than it would be in a world without barriers to …
Persistent link: https://www.econbiz.de/10012514947
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International financial flows and misallocation
Cingano, Federico; Hassan, Fadi - 2020
Persistent link: https://www.econbiz.de/10012486462
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Investing in Misallocation
Kilic, Mete; Tuzel, Selale - 2023
We document that 20% of Compustat firms have above-median investment rates despite having below-median marginal product of capital (MPK), seemingly "misallocating" productive resources. These firms are typically younger and significantly more likely to experience a substantial upward jump in...
Persistent link: https://www.econbiz.de/10014354150
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The Rise of (Mega-)Firms with Negative Net Earnings
Su, Dan - 2022
We document the prevalence of public companies with negative net earnings since the 1970s. The fraction of firms with negative net income has increased sharply from 18% in 1970 to 54% in 2019. Such an increase is mainly driven by the right shifts in the mean, i.e., the increasing popularity of...
Persistent link: https://www.econbiz.de/10013294005
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Risk-Adjusted Capital Allocation and Misallocation
David, Joel - 2018
We develop a theory linking “misallocation,” i.e., dispersion in static marginal products of capital (MPK), to systematic investment risks. In our setup, firms differ in their exposure to these risks, which we show leads naturally to heterogeneity in firm-level risk premia and, more...
Persistent link: https://www.econbiz.de/10012910538
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Risk-Adjusted Capital Allocation and Misallocation
David, Joel Michael; Schmid, Lukas; Zeke, David - 2021
We develop a theory linking “misallocation,” i.e., dispersion in marginal products of capital (MPK), to macroeconomic risk. Dispersion in MPK depends on (i) heterogeneity in firm-level risk premia and (ii) the price of risk, and thus is countercyclical. We document strong empirical support...
Persistent link: https://www.econbiz.de/10013314760
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Risk-adjusted capital allocation and misallocation
David, Joel M.; Schmid, Lukas; Zeke, David - 2020
We develop a theory linking "misallocation," i.e., dispersion in marginal products of capital (MPK), to macroeconomic risk. Dispersion in MPK depends on (i) heterogeneity in firm-level risk premia and (ii) the price of risk, and thus is countercyclical. We document strong empirical support for...
Persistent link: https://www.econbiz.de/10012395487
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Political Connections and Allocative Distortions
Schoenherr, David - 2018
Exploiting a unique institutional setting in Korea, this paper documents how politicians can increase the amount of government resources allocated through their social networks to the benefit of private firms connected to these networks. After winning the election, the new president appoints...
Persistent link: https://www.econbiz.de/10012937838