Publications
Publications
- 2008
Firm-Size Distribution and Cross-Country Income Differences
By: Laura Alfaro, Andrew Charlton and Fabio Kanczuk
Abstract
We investigate, using plant-level data for 79 developed and developing countries, whether differences in the allocation of resources across heterogeneous plants are a significant determinant of cross-country differences in income per worker. For this purpose, we use a standard version of the neoclassical growth model augmented to incorporate monopolistic competition among heterogeneous plants. For our preferred calibration, the model explains 58% of the log variance of income per worker. This figure should be compared to the 42% success rate of the usual model.
Keywords
Factories, Labs, and Plants; Developing Countries and Economies; Wages; Resource Allocation; Mathematical Methods
Citation
Alfaro, Laura, Andrew Charlton, and Fabio Kanczuk. "Firm-Size Distribution and Cross-Country Income Differences." NBER Working Paper Series, No. 14060, June 2008.