TY  - JOUR
AU  - Hsieh, Chang-Tai
AU  - Klenow, Peter J
TI  - Misallocation and Manufacturing TFP in China and India
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 13290
PY  - 2007
Y2  - August 2007
DO  - 10.3386/w13290
UR  - http://www.nber.org/papers/w13290
L1  - http://www.nber.org/papers/w13290.pdf
N1  - Author contact info:
Chang-Tai Hsieh
Booth School of Business
University of Chicago
5807 S Woodlawn Ave
Chicago, IL 60637
Tel: 773/8340590
Fax: 484-589-3583
E-Mail: chsieh@chicagoBooth.edu

Peter J. Klenow
Department of Economics
579 Jane Stanford Way
Stanford University
Stanford, CA  94305-6072
Tel: 650/725-8169
Fax: NA
E-Mail: Klenow@Stanford.edu
AB  - Resource misallocation can lower aggregate total factor productivity (TFP). We use micro data on manufacturing establishments to quantify the potential extent of misallocation in China and India compared to the U.S. Compared to the U.S., we measure sizable gaps in marginal products of labor and capital across plants within narrowly-defined industries in China and India. When capital and labor are hypothetically reallocated to equalize marginal products to the extent observed in the U.S., we calculate manufacturing TFP gains of 30-50% in China and 40-60% in India.
ER  -