Economics, Econometrics and Finance
4 years ago

Policy Distortions Drive Cross-Country Productivity Variations, Study Finds

SSRN Electronic Journal
Cross-Country Differences in Productivity: The Role of Allocation and Selection
Eric J. Bartelsman, John Haltiwanger, Stéfano Scarpetta

Paper Summary

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The article explores how differences in policies and institutions affect productivity levels in different countries. By analyzing data on firms within industries, the researchers found that the relationship between firm size and productivity varies across countries due to unique distortions. Their model shows that these distortions impact the overall performance of each country.