Microeconomic Sources of Aggregate Productivity Growth in the Chilean Manufacturing Industry

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dc.description.abstract A large literature documents the existence of aggregate productivity gains after the occurrence of events triggering changes in competitive pressure –such as trade liberalizations and pro-market reforms–, and most of these gains come from reallocation of resources within of the economies (Pavcnik, 2002, among others). However, most of these results rely on revenue-based productivity measures, which may hinder a substantial part of within-plant efficiency gains. In this paper we study micro-level productivity dynamics in the Chilean manufacturing industry. We first evaluate the relevance of the reallocation mechanism compared to the alternative, within-plants mechanism, when using efficiency measures that are not affected by prices. In the spirit of Garcia Marin and Voigtänder (2016), we show that a significant part of what the previous literature identified as between, and within (revenue-based) efficiency, gains are driven by markups variation. Thus, the within-plant efficiency gains mechanism is by far more relevant than what previously has been thought, while a significant portion of the reallocation mechanism actually reflects market share gains by high-markup plants. After establishing the predominant role of within-plants efficiency gains, in the second part of the paper we focus in exploring the determinants of the alternative, within-plants efficiency gains. In particular, we explore the role of demand (i.e., marketing expenditure) and supply factors (investment in technology) in explaining the observed patterns for TFPR and TFPQ. en
dc.title Microeconomic Sources of Aggregate Productivity Growth in the Chilean Manufacturing Industry en
dc.contributor.author Cusolito, Ana Paula
dc.contributor.author Garcia-Marin, Alvaro
dc.contributor.author Maloney, William F.
dc.date.accessioned 2017-02-23T16:49:17Z
dc.date.available 2017-02-23T16:49:17Z
dc.date.issued 2017-02-23
dc.identifier.uri http://lacer.lacea.org/handle/123456789/61242
lacea.language.supported en
dc.description Working paper
dc.language.iso en
dc.subject Physical Productivity
dc.subject Markups
dc.subject Demand
dc.subject Reallocation
dc.subject Chile
dc.type Working Paper

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