Analyzing the Sources of Misallocation in Indian Manufacturing: A Gross-Output Approach | Zendy

Sujana Kabiraj | Zendy

AI Assistant Blog Pricing

Home ZAIA Blog

Open Access

Analyzing the Sources of Misallocation in Indian Manufacturing: A Gross-Output Approach

Author(s) -

Sujana Kabiraj

Publication year - 2020

Publication title -

asian development review

Language(s) - English

Resource type - Journals

SCImago Journal Rank - 0.487

H-Index - 23

eISSN - 1996-7241

pISSN - 0116-1105

DOI - 10.1162/adev_a_00152

Subject(s) - economics , productivity , total factor productivity , manufacturing sector , aggregate (composite) , dispersion (optics) , work (physics) , capital (architecture) , variance (accounting) , raw material , econometrics , tertiary sector of the economy , macroeconomics , economy , engineering , mechanical engineering , history , chemistry , materials science , physics , accounting , archaeology , organic chemistry , optics , composite material

It is well established that misallocation of factor resources lowers productivity. In this paper, I use data from both formal and informal firms to study distortions in input and output markets as sources of misallocation in the Indian manufacturing sector. My work extends the seminal work of Hsieh and Klenow (2009). I consider output, capital, raw material, energy, and service sector distortions in a monopolistically competitive framework to measure the aggregate dispersion in total factor revenue productivity (TFPR). I also decompose the variance in TFPR and show that raw material and output distortions play a major role in defining aggregate misallocation.

The content you want is available to Zendy users.

Already have an account? Click here to sign in.

Having issues? You can contact us here

Accelerating Research