The role of returns to scale in measuring frictions in resource allocation: Revisiting misallocation and manufacturing TFP in China

Guan Gong; Guanliang Hu

doi:10.1016/j.econlet.2015.11.014

The role of returns to scale in measuring frictions in resource allocation: Revisiting misallocation and manufacturing TFP in China

Guan Gong
, Guanliang Hu

Research output: Journal Publications and Reviews › RGC 21 - Publication in refereed journal › peer-review

18 Citations (Scopus)

Abstract

This paper extends the study by Hsieh and Klenow (2009) on productivity implication of resource misallocation by relaxing the assumption of constant returns to scale (CRS) for differentiated products. We show that when the CRS assumption fails, measuring frictions in resource allocation by variation in revenue productivity, as proposed by Hsieh and Klenow (2009), overestimates the resource misallocation in China. © 2015 Elsevier B.V.

Original language	English
Pages (from-to)	26-29
Journal	Economics Letters
Volume	138
DOIs	https://doi.org/10.1016/j.econlet.2015.11.014
Publication status	Published - 1 Jan 2016
Externally published	Yes

Bibliographical note

Publication details (e.g. title, author(s), publication statuses and dates) are captured on an “AS IS” and “AS AVAILABLE” basis at the time of record harvesting from the data source. Suggestions for further amendments or supplementary information can be sent to [email protected].

UN SDGs

This output contributes to the following UN Sustainable Development Goals (SDGs)

SDG 9 Industry, Innovation, and Infrastructure

Research Keywords

Misallocation
Returns to scale
TFP

Policy Impact

Cited in Policy Documents

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10.1016/j.econlet.2015.11.014

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abstract = "This paper extends the study by Hsieh and Klenow (2009) on productivity implication of resource misallocation by relaxing the assumption of constant returns to scale (CRS) for differentiated products. We show that when the CRS assumption fails, measuring frictions in resource allocation by variation in revenue productivity, as proposed by Hsieh and Klenow (2009), overestimates the resource misallocation in China. {\textcopyright} 2015 Elsevier B.V.",

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AU - Gong, Guan

AU - Hu, Guanliang

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PY - 2016/1/1

Y1 - 2016/1/1

N2 - This paper extends the study by Hsieh and Klenow (2009) on productivity implication of resource misallocation by relaxing the assumption of constant returns to scale (CRS) for differentiated products. We show that when the CRS assumption fails, measuring frictions in resource allocation by variation in revenue productivity, as proposed by Hsieh and Klenow (2009), overestimates the resource misallocation in China. © 2015 Elsevier B.V.

AB - This paper extends the study by Hsieh and Klenow (2009) on productivity implication of resource misallocation by relaxing the assumption of constant returns to scale (CRS) for differentiated products. We show that when the CRS assumption fails, measuring frictions in resource allocation by variation in revenue productivity, as proposed by Hsieh and Klenow (2009), overestimates the resource misallocation in China. © 2015 Elsevier B.V.

KW - Misallocation

KW - Returns to scale

KW - TFP

UR - https://www.scopus.com/pages/publications/84960428062

UR - https://www.scopus.com/record/pubmetrics.uri?eid=2-s2.0-84960428062&origin=recordpage

UR - https://app-overton-io.ezproxy.cityu.edu.hk/articles.php?query=10.1016/j.econlet.2015.11.014

U2 - 10.1016/j.econlet.2015.11.014

DO - 10.1016/j.econlet.2015.11.014

M3 - RGC 21 - Publication in refereed journal

SN - 0165-1765

VL - 138

SP - 26

EP - 29

JO - Economics Letters

JF - Economics Letters

ER -

The role of returns to scale in measuring frictions in resource allocation: Revisiting misallocation and manufacturing TFP in China

Abstract

Bibliographical note

UN SDGs

Research Keywords

Policy Impact

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