scholarly journals Financial friction, resource misallocation and total factor productivity: theory and evidence from China

2021 ◽  
Vol 24 (1) ◽  
pp. 393-408
Author(s):  
Yanli Wang ◽  
Xiaodong Lei ◽  
Fan Yang ◽  
Na Zhao
Keyword(s):  
Total Factor Productivity ◽  
Factor Productivity ◽  
Financial Friction ◽  
Resource Misallocation ◽  
Productivity Theory

Resource misallocation of SMEs in Vietnamese manufacturing sector

2019 ◽  
Vol 26 (3) ◽  
pp. 290-303
Author(s):  
Phuong Thi Nguyen ◽  
Minh Khac Nguyen
Keyword(s):  
Developing Countries ◽  
Total Factor Productivity ◽  
Design Methodology ◽  
Large Scale ◽  
Manufacturing Sector ◽  
Factor Productivity ◽  
Content Type ◽  
Resource Misallocation ◽  
Productivity Decomposition ◽  
Enterprise Survey

Purpose The purpose of this paper is to examine resource misallocation among Vietnam’s small- and medium-sized enterprises (SMEs) in the manufacturing sector. The paper also aims to consider selective factors on reducing the level of resource misallocation in SMEs. Design/methodology/approach Resource misallocation and efficiency gains in total factor productivity (TFP) are assessed using Vietnam’s annual enterprise survey data for the period 2000–2015 and an appropriate productivity decomposition framework. Findings Resource misallocation is found to be higher among SMEs than large scale enterprises. TFP is found to 116.3 per cent greater if there is no resource misallocation among SMEs. Smaller scale, lower market concentration, trade liberalisation and corruption control are found to be associated with lower level of resource misallocation in SMEs. Research limitations/implications The major limitation of this study is that it has only decomposed misallocation of resources arising from output and capital distortions and that it focusses on selective factors contribution to reducing misallocation level in SMEs. Originality/value Resource misallocation is attracting attention in both developed and developing countries. However, knowledge about resource misallocation among SMEs is limited, particularly in the context of developing countries. This paper assesses the level of resource misallocation among SMEs in Vietnamese manufacturing sector.

MISALLOCATION OF RESOURCES, TOTAL FACTOR PRODUCTIVITY, AND THE CLEANSING HYPOTHESIS

2020 ◽  
pp. 1-38
Author(s):  
George Vachadze
Keyword(s):  
Total Factor Productivity ◽  
Capita Income ◽  
Economic Recession ◽  
Credit Market ◽  
Factor Productivity ◽  
Per Capita Income ◽  
Economic Success ◽  
Resource Misallocation ◽  
Per Capita ◽  
Economic Boom

Imperfections in the credit market can hamper the flow of factors from less productive to more productive firms and result in a lower aggregate total factor productivity (TFP). Depth of such misallocation will depend on per capita income, the level of imperfections in the credit market, and the distribution of entrepreneurial productivity. Under some parameter configurations, we find that per capita income and TFP may affect each other so that an economic boom may cause higher resource misallocation, lower TFP, and economic recession. At the same time, an economic recession may have a “cleansing effect” on TFP leading to a lower resource misallocation, higher TFP, and economic boom. In other words, economic success may breed the failure and the failure can become a precondition for success so that the boom-bust cycles in resource misallocation, TFP, and per capita income may become endogenous.

scholarly journals Misallocation and Productivity: The Case of Vietnamese Manufacturing

2016 ◽  
Vol 33 (2) ◽  
pp. 94-118 ◽  
Author(s):  
Doan Thi Thanh Ha ◽  
Kozo Kiyota ◽  
Kenta Yamanouchi
Keyword(s):  
Size Distribution ◽  
Total Factor Productivity ◽  
Substantial Improvement ◽  
Manufacturing Firms ◽  
Viet Nam ◽  
Factor Productivity ◽  
Potential Productivity ◽  
Resource Misallocation ◽  
Productivity Gains ◽  
Actual Size

This paper attempts to measure the effect of resource misallocation on aggregate manufacturing total factor productivity, focusing on Vietnamese manufacturing firms during the period 2000–2009. One of the major findings of this paper is that there would have been substantial improvement in aggregate total factor productivity in Viet Nam in the absence of distortions. The results imply that potential productivity gains from removing distortions in Vietnamese manufacturing are large. We also find that smaller firms tend to face advantageous distortions, while larger firms tend to face disadvantageous ones. Moreover, the efficient size distribution is more dispersed than the actual size distribution. These results suggest that Viet Nam's policies may constrain its largest and most efficient producers, and coddle its smallest and least efficient ones.

scholarly journals Environmental Regulation, Resource Misallocation and Industrial Total Factor Productivity: A Spatial Empirical Study Based on China’s Provincial Panel Data

2021 ◽  
Vol 13 (4) ◽  
pp. 2390
Author(s):  
Xu Dong ◽  
Yali Yang ◽  
Xiaomeng Zhao ◽  
Yingjie Feng ◽  
Chenguang Liu
Keyword(s):  
Panel Data ◽  
Environmental Regulation ◽  
Total Factor Productivity ◽  
Spillover Effect ◽  
Factor Productivity ◽  
Resource Reallocation ◽  
Spatial Spillover ◽  
Resource Misallocation ◽  
Capital Misallocation ◽  
Spatial Spillover Effect

A vast theoretical and empirical literature has been devoted to exploring the relationship between environmental regulation and total factor productivity (TFP), but no consensus has been reached and the reason may be attributed to the fact that the resource reallocation effect of environmental regulation is ignored. In this paper, we introduce resource misallocation in the process of discussing the impact of environmental regulation on TFP, taking China’s provincial industrial panel data from 1997 to 2017 as a sample, and the spatial econometric method is employed to investigate whether environmental regulation has a resource reallocation effect and affects TFP. The results indicate that there is a U-shaped relationship between environmental regulation and industrial TFP and a negative spatial spillover effect of environmental regulation on industrial TFP at the provincial level in China. Both capital misallocation and labor misallocation will lead to the loss of industrial TFP. Capital misallocation has a negative spatial spillover effect on industrial TFP, while labor misallocation is just the opposite. Environmental regulation can produce a positive resource reallocation effect, which in turn promotes the industrial TFP in the range of 28% to 33%, while capital misallocation and labor misallocation are only partial mediator.

IS RESOURCE MISALLOCATION LEADING TO PRODUCTIVITY GAPS IN MALAYSIA’S MANUFACTURING SECTOR?

2020 ◽  
Vol 65 (05) ◽  
pp. 1213-1235
Author(s):  
LAY LIAN CHUAH ◽  
NORMAN V. LOAYZA ◽  
HA NGUYEN
Keyword(s):  
Total Factor Productivity ◽  
Manufacturing Sector ◽  
Aggregate Productivity ◽  
Factor Productivity ◽  
Gross Domestic Product Growth ◽  
Large Aggregate ◽  
High Productivity ◽  
Resource Misallocation ◽  
Productivity Gains ◽  
Reallocation Of Resources

The reallocation of resources from low- to high-productivity firms can generate large aggregate productivity gains. The paper uses data from the Malaysian manufacturing censuses of 2005 and 2010 to measure the country’s hypothetical productivity gains if all misallocation within industries are removed. Comparing the results across the two census waves, we conclude that efficiency gaps (that is, the degree of misallocation) in Malaysia have narrowed by one-fifth. The efficiency gaps, however, appear to be over 40%, indicating a substantial room for improvement. This is important, particularly if total factor productivity growth is expected to support future economic growth. The analysis in this paper accounts only for resource misallocation within sectors. There may be other, possibly large, resource misallocation across sectors. Closing those gaps could boost total factor productivity and gross domestic product growth even further.

In Quest of Institutional Interpretation of TFP Change—The Case of China

2019 ◽  
Vol 6 (2) ◽  
Author(s):  
Harry X. Wu
Keyword(s):  
Total Factor Productivity ◽  
Integrated Approach ◽  
Productivity Change ◽  
Factor Productivity ◽  
Organizational Changes ◽  
Market System ◽  
Positive Externalities ◽  
Chinese Case ◽  
Institutional Effect ◽  
Productivity Theory

Abstract This research note reiterates the productivity theory in the Solow growth accounting framework to explore an institutional interpretation of changes in total factor productivity. In theory, total factor productivity or TFP growth is a costless gain in output, which captures the effect of positive externalities caused by spillovers of technological and organizational changes in a perfect market system. This provides a yardstick to gauge institutional effect on output in an imperfect market system if all inputs are properly measured. Using the Chinese case, I show that an integrated approach a la Jorgenson and Griliches (1967. “The Explanation of Productivity Change.” Review of Economic Studies 34 (3): 249–283) that ensures a consistency between theory, methodology and measurement can facilitate empirical exercises even with data problems, and a so-constructed TFP index for China can satisfactorily reproduce China’s post-reform productivity path with institutional interpretations.

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