Misallocation and manufacturing TFP in Colombia

Camacho, Adriana, Conover, Emily and Scrimgeour, Dean (2024) Misallocation and manufacturing TFP in Colombia. Economía LACEA Journal, 23 (1). 1 - 29. ISSN 1533-6239

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Abstract

Following Hsieh and Klenow (2009) this paper studies productivity dispersion in Colombian industrial establishments using the Colombian Annual Manufacturing Survey (AMS) from 1982 to 1998. We consider how much a hypothetical removal of firm-level distortions would increase manufacturing productivity in Colombia and compare it with the United States. We find that such a reallocation would increase manufacturing Total Factor Productivity (TFP) in Colombia around 15% more than in the United States in our baseline calibration. We find that distortions have been increasing over time. Productivity gains are larger if we use Colombia’s higher estimated elasticity of output with respect to capital. Furthermore we show that TFP is positively correlated with exporting status, age, size, and location in the Oriental region and the capital of the country.

Item Type:	Article
Additional Information:	© 2024 The Author(s)
Divisions:	LSE
Subjects:	H Social Sciences > HC Economic History and Conditions H Social Sciences > HF Commerce
JEL classification:	O - Economic Development, Technological Change, and Growth > O4 - Economic Growth and Aggregate Productivity > O47 - Measurement of Economic Growth; Aggregate Productivity; Cross-Country Output (Income) Convergence D - Microeconomics > D2 - Production and Organizations > D24 - Production; Cost; Capital and Total Factor Productivity; Capacity
Date Deposited:	28 Mar 2024 15:03
Last Modified:	28 Mar 2024 15:12
URI:	http://eprints.lse.ac.uk/id/eprint/122533

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