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Distorsions, resource al location and productivity in Latin America

We develop a span-of-control model where managerial skills are endogenous and the outcome of investments over the life cycle of managers. We calibrate such model to U.S. data, and use it to evaluate the interplay between idiosyncratic distortions and exogenous productivity in accounting for plan-size differences and output per worker in Mexico. We find that idiosyncratic distortions, as heavier implicit subsidies on small and large establishments, are essential to generate a plant-size distribution in line with Mexican data. Differences in exogenous productivity drive the bulk of output per-worker differences between the U.S. and Mexico.

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Subject

Sector financiero | Economía | Transformación productiva | Investigación socioeconómica

País / Región

México
Estados Unidos

URI

https://scioteca.caf.com/handle/123456789/244

Date

2012

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6.1 Documentos de trabajo en investigación socioeconómica

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CC-BY-NC
Except where otherwised noted, this item's license is described as CC-BY-NC
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distorsions_resource_allocation_productivity_latin_america.pdf (365.73 KB)

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CAF

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