Entry and Exit, Multiproduct Firms, and Allocative Distortions

• 成果类型: Article
• 署名作者: Jaef, Roberto N. Fattal
• 署名单位: The World Bank
• 刊物名称: AMERICAN ECONOMIC JOURNAL-MACROECONOMICS
• ISSN/ISSBN: 1945-7707
• DOI: 10.1257/mac.20140075
• 发表日期: 2018
• 页码: 86-112
• 关键词: productivity; selection

摘要

Most studies quantifying the gains from reversing allocative distortions are static in nature. We propose a model of firm dynamics featuring entry, exit, and multiproduct firms to understand the contribution of these dynamic factors in shaping the welfare and long-run productivity gains from removing distortions. We find that while the entry and exit of firms and their product-portfolio choices exert countervailing forces over long-run total factor productivity (TFP), they reinforce each other in shaping the welfare gains from reversing misallocation. Welfare gains, which account for transition dynamics, become more than twice as high as the long-run changes TFP.