Firm-size distribution and cross-country income differences
By: Laura Alfaro, Andrew Charlton, Fabio Kanczuk
Contributors: Charlton, Andrew (Andrew Henry George), 1978-; Kanczuk, Fabio, 1969-; Harvard Business School
Edition: Rev.
Series: Working paper /Harvard Business School -- 07-086; Working paper (Harvard Business School) -- 07-086
Publisher: Harvard Business School
Published: 2008
Place of publication: Boston]
Language: eng
Number of pages: 32
Description: We investigate, using firm 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 firms. 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.
Notes: "Revised May 2008"--Publisher's website.

Includes bibliographical references.