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The Sources of Capital Misallocation / Joel M. David, Venky Venkateswaran.
- Format:
- Book
- Author/Creator:
- David, Joel M.
- Series:
- Working Paper Series (National Bureau of Economic Research) no. w23129.
- NBER working paper series no. w23129
- Language:
- English
- Physical Description:
- 1 online resource: illustrations (black and white);
- Place of Publication:
- Cambridge, Mass. National Bureau of Economic Research 2017.
- Summary:
- We develop a methodology to disentangle sources of capital 'misallocation', i.e. dispersion in value-added/capital. It measures the contributions of technological/informational frictions and a rich class of firm-specific factors. An application to Chinese manufacturing firms reveals that adjustment costs and uncertainty, while significant, explain only a modest fraction of the dispersion, which stems largely from other factors: a component correlated with productivity and a fixed effect. Adjustment costs are more salient for large US firms, though other factors still account for bulk of the dispersion. Technological/ markup heterogeneity explains a limited fraction in China, but a potentially large share in the US.
- Notes:
- Print version record
- February 2017.
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