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Browsing Economics by Author "Adamopoulos, Anastasios T."
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Item Open Access Essays On Productivity and Resource Reallocation(2015-01-26) Sadeghzadeh Biglari, Javad; Adamopoulos, Anastasios T.My thesis consists of four chapters that examine how productivity is affected by government policies and market regulations. In particular, I study the impact of policy reforms on productivity through their effect on: (a) the allocation of resources across heterogeneous establishments, and (b) productivity at the establishment-level via technology adoption. In chapter one, I develop a theoretical model to analyze the effect of environmental policies on industry productivity and market competition. In my model, environmental regulations affect not only the allocation of resources across incumbent firms but also the incentive of firms to invest in pollution-abatement technologies. My findings imply that environmental regulations raise both environmental quality (by incentivizing the adoption of “cleaner” technologies), and industry productivity (by reallocating resources to more productive firms). In chapters two and three, using micro-level data from Indian manufacturing plants, I study total factor productivity (TFP) growth, and the contribution of firm-level subsidies to overall TFP growth. My analysis recognizes that while size-dependent subsidies may induce technology adoption for recipient firms, they also generate misallocation of resources across firms. I focus on the India subsidy program initiated in 2005 in Iron and Steel Industry. In chapter two, my growth accounting provides evidence of an acceleration of TFP growth after 2005 but primarily among plants that adopted more productive technologies. In chapter three, using a general equilibrium model with heterogeneous firms and a technology choice at the firm-level, I examine the impact of size-dependent subsidies on industry productivity. I show that while the induced misallocation tends to reduce productivity, technology adoption raises it. In the context of this model, the policy contributed about 20% to the observed productivity growth. In chapter four, I assess the effect of labor market reforms on measures of productivity across Indian states. Using a state-level labor reform index, and plant-level data, I show that large plants, in labor intensive industries, operating in the states with flexible labor market are more likely to gain from labor market reforms through an improvement in TFP and labor productivity.Item Open Access Misallocation and Productivity: Micro Evidence from Bangladesh(2016-09-20) Jalil, Ferdous Bin; Adamopoulos, Anastasios T.An important determinant of aggregate measured productivity is how resources are allocated across heterogeneous production units. Idiosyncratic distortions from institutional policies and factors can be a source for resource misallocation resulting in lower total factor productivity and aggregate output. Distortions create heterogeneity in production units: cause before-tax marginal revenue products to be higher in production units that face disincentives, and to be lower in production units that receive incentives. In the absence of distortions, production units equate marginal products with their corresponding factor prices, making resource allocations efficient because the more productive units proportionately use more resources. In the presence of distortions, they are equated with both factor prices and distortions, making equilibrium allocations dependent on both individual TFPs and distortions and resulting in aggregate output and TFP losses. Using detailed household farm-level data from Bangladesh, I measure the observed gross TFP of Bangladesh's agriculture. I find that capital and intermediate inputs are misallocated in Bangladesh. If resources were hypothetically reallocated across farms, then aggregate TFP could increase by more than 120% relative to the observed TFP. Using firm-level manufacturing data from Bangladesh, I develop a model to measure industry-level and aggregate TFP. If allocations were efficient, then aggregate TFP could increase by 95%. Capital is more misallocated than labor in manufacturing. I develop a two-sector model of agriculture and non-agriculture, each with an endogenous distribution of production units. Sector-wise, the distribution of active production units depends on the productivity of the unit operation and idiosyncratic distortions that the unit faces in that sector. I capture idiosyncratic distortions as a producer-sector-specific output tax that stands in as a catch-all for the policies and institutions that alter the relative prices faced by producers within each sector. I use micro-level data on manufacturing plants and farms and a quantitative framework to measure the distortions. I calibrate my model to the micro data from Bangladesh with observed distortions. I find that eliminating distortions in each sector raises productivity in that sector, but at the aggregate level it is only improvements in agricultural labor productivity that generate substantial structural change in the economy.