Deregulation, Misallocation, and Size: Evidence from India

Deregulation, Misallocation, and Size: Evidence from India

This paper examines the impact of the deregulation of compulsory industrial licensing in India on firm-size dynamics and the reallocation of resources within industries over time. Following deregulation, we find that the extent of resource misallocation declines and a considerable thickening of the left-hand tail of the firm-size distribution suggesting a significant increase in the number of s...

State Misallocation and Housing Prices: Theory and Evidence from China

This paper examines the equilibrium price effects of the privatization of housing assets that were previously owned and allocated by the state. I develop a theoretical framework that shows that privatization can have ambiguous effects on prices in the private market, and that the degree of misallocation of the assets prior to privatization determines the subsequent price effects. I test the pre...

Heterogeneity, Measurement Error, and Misallocation: Evidence from African Agriculture

Misallocation and Manufacturing TFP in China and India

Resource misallocation can lower aggregate total factor productivity (TFP). We use micro data on manufacturing establishments to try to quantify the extent of this misallocation in China and India in recent years. Viewing the data through the prism of the Melitz model of monopolistically competitive firms, we estimate sizable gaps in marginal products of labor and capital across plants within n...

Evidence from China and India

This paper examines the country specific effect of policy reform on infrastructure spending in China and India. In China we have examined how marketization and decentralization has affected the composition of provincial public expenditure and in the case of India we have examined the impact of fiscal reforms on sub-national infrastructure spending. It is observed that in China with a lower mark...