Replication data for: Finance and Misallocation: Evidence from Plant-Level Data

Principal Investigator(s): View help for Principal Investigator(s) Virgiliu Midrigan; Daniel Yi Xu

Name	File Type	Size	Last Modified
corr.m	text/x-fortran	50 bytes	10/11/2019 05:35:PM
ergodic.m	text/plain	995 bytes	10/11/2019 05:35:PM
ergodic.m-	text/plain	937 bytes	10/11/2019 05:35:PM
hist2.m	text/plain	830 bytes	10/11/2019 05:35:PM
simulate.m	text/plain	18.7 KB	10/11/2019 05:35:PM
simulate.m-	text/plain	18.7 KB	10/11/2019 05:35:PM
solve_static.m	text/plain	1.7 KB	10/11/2019 05:35:PM
start.m	text/plain	4.1 KB	10/11/2019 05:35:PM

Project Description

Summary: We use producer-level data to evaluate the role of financial frictions in determining total factor productivity (TFP). We study a model of establishment dynamics in which financial frictions reduce TFP through two channels. First, finance frictions distort entry and technology adoption decisions. Second, finance frictions generate dispersion in the returns to capital across existing producers and thus productivity losses from misallocation. Parameterizations of our model consistent with the data imply fairly small losses from misallocation, but potentially sizable losses from inefficiently low levels of entry and technology adoption.

Scope of Project

JEL Classification:
      E32 Business Fluctuations; Cycles
      E44 Financial Markets and the Macroeconomy
      F41 Open Economy Macroeconomics
      G32 Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
      L60 Industry Studies: Manufacturing: General
      O33 Technological Change: Choices and Consequences; Diffusion Processes
      O47 Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence

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Published Versions

V1 [2019-10-11]

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