Productivity Loss and Misallocation of Resources in Southeast Asia
This paper examines within-sector resource misallocation in three Southeast Asian countries -- Indonesia, Malaysia, and Vietnam. The methodology accounts for measurement error in revenues and costs. The firm-level evidence suggests that measurement...
| Main Authors: | , , |
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| Format: | Working Paper |
| Language: | English |
| Published: |
World Bank, Washington, DC
2020
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/988961606749814811/Productivity-Loss-and-Misallocation-of-Resources-in-Southeast-Asia http://hdl.handle.net/10986/34838 |
| Summary: | This paper examines within-sector
resource misallocation in three Southeast Asian countries --
Indonesia, Malaysia, and Vietnam. The methodology accounts
for measurement error in revenues and costs. The firm-level
evidence suggests that measurement error is substantial,
resulting in an overestimation of misallocation by as much
as 30 percent. Nevertheless, resource misallocation across
firms within a sector remains large, albeit declining. The
findings imply that there are considerable potential gains
from efficient reallocation -- above 80 percent for
Indonesia and around 20 to 30 percent for Malaysia and
Vietnam. Private domestic firms and firms with higher
productivity appear to face larger distortions that prevent
them from expanding. |
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