Publication:
Capital Allocation in Developing Countries

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creativeworkseries.issn1564-698X
dc.contributor.authorDavid , Joel M.
dc.contributor.authorVenkateswaran, Venky
dc.contributor.authorCusolito, Ana Paula
dc.contributor.authorDidier, Tatiana
dc.date.accessioned2024-01-05T16:55:48Z
dc.date.available2024-01-05T16:55:48Z
dc.date.issued2020-09-08
dc.description.abstractThis paper investigates the sources of capital misallocation across a group of developing and developed countries, using the empirical methodology developed in David and Venkateswaran (2019. “The Sources of Capital Misallocation.” American Economic Review 109 (7): 2531–67). The main findings are: (i) technological frictions—namely, adjustment costs and uncertainty—account for only a modest share of the observed misallocation; (ii) heterogeneity in firm-level technologies potentially explains between one-quarter and one-half, but (iii) dispersion in markups is much smaller; (iv) after accounting for these factors, on average, at least 50 percent of misallocation within each country remains unexplained, suggesting a large role for additional—potentially distortionary—factors. These factors are largely attributable to a component that is correlated with firm size/productivity and one that is essentially permanent to the firm. They exhibit strong negative correlations with income per capita and direct measures of the quality of the business environment from the World Bank Doing Business Report. The paper reports a broad set of moments describing firm-level investment dynamics and detailed parameter estimates on a country-by-country basis with an eye towards future work in this area.en
dc.identifier.citationThe World Bank Economic Review
dc.identifier.doi10.1596/40844
dc.identifier.issn0258-6770 (print)
dc.identifier.issn1564-698X (online)
dc.identifier.urihttps://openknowledge.worldbank.org/handle/10986/40844
dc.language.isoen_US
dc.publisherPublished by Oxford University Press on behalf of the World Bank
dc.relation.ispartofseriesWorld Bank Economic Review
dc.rightsCC BY-NC-ND 3.0 IGO
dc.rights.holderWorld Bank
dc.rights.urihttps://creativecommons.org/licenses/by-nc-nd/3.0/igo/
dc.subjectPRODUCTIVITY
dc.subjectMISALLOCATION
dc.subjectINVESTMENT
dc.subjectADJUSTMENT COSTS
dc.subjectUNCERTAINTY
dc.titleCapital Allocation in Developing Countriesen
dc.typeJournal Article
dspace.entity.typePublication
okr.associatedcontenthttps://academic.oup.com/wber/article/35/4/1102/5902750 Journal website (version of record)
okr.crossref.titleCapital Allocation in Developing Countries
okr.date.disclosure2020-09-08
okr.doctypePublications & Research
okr.doctypePublications & Research::Journal Article
okr.identifier.doidoi.org/10.1093/wber/lhaa020
okr.identifier.doihttp://dx.doi.org/10.1596/40844
okr.language.supporteden
okr.pagenumber1102–1121
okr.peerreviewAcademic Peer Review
okr.region.geographicalWorld
okr.topicFinance and Financial Sector Development::Capital Markets and Capital Flows
okr.topicMacroeconomics and Economic Growth::Economic Growth
okr.volume35 (4)
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relation.isAuthorOfPublication.latestForDiscovery2151d2ff-4e3c-5181-b0a1-bf5a52b587ec
relation.isJournalIssueOfPublication455cced1-cae6-4923-b253-a7db178b26c2
relation.isJournalIssueOfPublication.latestForDiscovery455cced1-cae6-4923-b253-a7db178b26c2
relation.isJournalOfPublicationc41eae2f-cf94-449d-86b7-f062aebe893f
relation.isJournalVolumeOfPublication3a13adfa-b971-4f6d-9aaa-21ba96efc218
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