Entry Barriers, Idiosyncratic Distortions, and the Firm-Size Distribution

Entry Barriers, Idiosyncratic Distortions, and the Firm-Size Distribution

This paper studies the interaction between entry barriers and idiosyncratic distortions in the context of a standard model of firm dynamics. It derives a strategy to infer entry barriers based on the combination of cross-country data on average fir...

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Bibliographic Details
Main Author: Fattal-Jaef, Roberto N.
Format: Working Paper
Language:English
Published: World Bank, Washington, DC 2019
Subjects:
ENTRY BARRIERS
MISALLOCATION
TOTAL FACTOR PRODUCTIVITY
FIRM SIZE
Online Access:http://documents.worldbank.org/curated/en/735701569588825933/Entry-Barriers-Idiosyncratic-Distortions-and-the-Firm-Size-Distribution
http://hdl.handle.net/10986/32486
id okr-10986-32486
recordtype oai_dc
spelling okr-10986-324862022-09-20T00:14:04Z Entry Barriers, Idiosyncratic Distortions, and the Firm-Size Distribution Fattal-Jaef, Roberto N. ENTRY BARRIERS MISALLOCATION TOTAL FACTOR PRODUCTIVITY FIRM SIZE This paper studies the interaction between entry barriers and idiosyncratic distortions in the context of a standard model of firm dynamics. It derives a strategy to infer entry barriers based on the combination of cross-country data on average firm size, cross-country estimates of idiosyncratic distortions, and equilibrium conditions of the theory. It finds sizable entry barriers that correlate positively with income per-capita. The TFP gains from complete reversals of distortions range between 20 and 50 percent. Idiosyncratic distortions are most distortive in low income countries whereas entry barriers are relatively more detrimental in advanced economies. The study also finds that distortions tend to mitigate each other's negative effect on TFP. 2019-10-04T17:03:55Z 2019-10-04T17:03:55Z 2019-09 Working Paper http://documents.worldbank.org/curated/en/735701569588825933/Entry-Barriers-Idiosyncratic-Distortions-and-the-Firm-Size-Distribution http://hdl.handle.net/10986/32486 English Policy Research Working Paper;No. 9027 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo World Bank World Bank, Washington, DC Publications & Research Publications & Research :: Policy Research Working Paper
repository_type Digital Repository
institution_category Foreign Institution
institution Digital Repositories
building World Bank Open Knowledge Repository
collection World Bank
language English
topic ENTRY BARRIERS
MISALLOCATION
TOTAL FACTOR PRODUCTIVITY
FIRM SIZE
spellingShingle ENTRY BARRIERS
MISALLOCATION
TOTAL FACTOR PRODUCTIVITY
FIRM SIZE
Fattal-Jaef, Roberto N.
Entry Barriers, Idiosyncratic Distortions, and the Firm-Size Distribution
relation Policy Research Working Paper;No. 9027
description This paper studies the interaction between entry barriers and idiosyncratic distortions in the context of a standard model of firm dynamics. It derives a strategy to infer entry barriers based on the combination of cross-country data on average firm size, cross-country estimates of idiosyncratic distortions, and equilibrium conditions of the theory. It finds sizable entry barriers that correlate positively with income per-capita. The TFP gains from complete reversals of distortions range between 20 and 50 percent. Idiosyncratic distortions are most distortive in low income countries whereas entry barriers are relatively more detrimental in advanced economies. The study also finds that distortions tend to mitigate each other's negative effect on TFP.
format Working Paper
author Fattal-Jaef, Roberto N.
author_facet Fattal-Jaef, Roberto N.
author_sort Fattal-Jaef, Roberto N.
title Entry Barriers, Idiosyncratic Distortions, and the Firm-Size Distribution
title_short Entry Barriers, Idiosyncratic Distortions, and the Firm-Size Distribution
title_full Entry Barriers, Idiosyncratic Distortions, and the Firm-Size Distribution
title_fullStr Entry Barriers, Idiosyncratic Distortions, and the Firm-Size Distribution
title_full_unstemmed Entry Barriers, Idiosyncratic Distortions, and the Firm-Size Distribution
title_sort entry barriers, idiosyncratic distortions, and the firm-size distribution
publisher World Bank, Washington, DC
publishDate 2019
url http://documents.worldbank.org/curated/en/735701569588825933/Entry-Barriers-Idiosyncratic-Distortions-and-the-Firm-Size-Distribution
http://hdl.handle.net/10986/32486
_version_ 1764476639613288448

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