"Inefficient Exit of Firms: Measuring the Impact on Aggregate Productivity"
Abstract: I develop a model of firm-dynamics which provides a theoretical characterization as well as a new empirical test for inefficient firm exit. When applied to European firm-level data, my test results suggest that firm exit is less efficient in poorer countries. Calibration of the model suggests that more efficient selection could increase aggregate productivity by as much as 31% in developing economies, implying large reductions in the productivity gap across countries.
Abstract: Capital adjustment costs and firm-level policy distortions can both describe higher dispersion of marginal products in developing countries. I develop a general equilibrium model of firm dynamics that incorporates both channels in an environment where firms can optimally exit the industry. I show that while having similar effects on static measures of misallocation, adjustment costs and policy distortions have opposing effects on the composition of exiting firms. I use this property of the model and moments from the firm level data in the US and China to identify the share of adjustment costs in dispersion of marginal products. The results show that adjustment costs explain less than 10% of the measured misallocation. Policy distortions on the other hand, explain 45% and 67% of measured misallocation in US and China respectively.
"Cross-Country Differences in Productivity: Evidence from Firm-Level Data"
Abstract: This paper uses firm-level data for a wide range of countries and provides estimates of total factor productivity – hereafter TFP – in the manufacturing sector. Aggregate TFP at the country level and its importance in explaining income difference across the world are analyzed. I show that when constructed from firm-level data, the variation in TFP across countries is lower than commonly calculated in the development accounting literature using aggregate variables. I find that less than 55% of income differences across countries can be explained by differences in TFP.
“Price Setting Under Hyperinflation”, (joint with Yang Li)
“Informal Competition and Productivity Growth: Evidence from Firm-Level Data”, (joint with Tyler Schipper)
“Interprovincial Trade Barriers and Canadian Productivity Slowdown”, (joint with Marieh Azizirad)