Title: Firm-size distribution and cross-country income differences
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"--National Bureau of Economic Research web site.