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Following Hsieh and Klenow (2009), this paper studies productivity dispersions in Colombian industrial establishments using the Colombian Annual Manufacturing Survey (AMS) from 1982 to 1998. The United States is used as a benchmark to estimate the reallocation of capital and labor to equalize marginal products across plants in Colombia. Gains are found in manufacturing Total Factor Productivity (TFP) of approximately 3-8 percent and TPF is positively correlated with exporting status, age, size, and location in the central region of the country. There is also suggestive evidence that opening the economy in 1991 is associated with an increase in plant productivity levels for firms that export goods. The 1990 reform that reduced dismissal costs is associated with an increase in productivity, while the reform that increased labor costs in 1993 is associated with a decrease in plants’ productivity. Further work is needed to establish a causal relation between productivity and policy changes.
The laws that regulate relations between firms and workers in Mexico distinguish sharply between salaried and non-salaried workers, and they are at the root of the existence of informality. This paper provides a clear definition of informality, distinguishing it from illegality. Using Mexico’s Economic Census, the paper shows that the majority of firms are informal but legal, that there are more s ... (View publication)
Total factor productivity (TFP) in Latin America has not increased relative to the US since the mid- 1970s, and in many countries it has declined. Moreover, resource misallocation can lower aggregate TFP. This paper presents evidence based on firm-level data from 10 Latin American countries to quantify the heterogeneity of firm productivity and the degree of resource misallocation within countries ... (View publication)
This paper estimates the impact of financial development on industry-level total factor productivity (TFP) growth using a largely unexploited panel of 77 countries with data for 26 manufacturing industries for the years 1963 to 2003. A significant relationship is found between financial development and industry-level TFP growth when controlling for country-time and industry-time fixed effects. The ... (View publication)
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