Estimates for the U.S. suggest that at least in some sectors productivity enhancing reallocation is the dominant factor in accounting for productivity growth. An open question, particularly relevant for developing countries, is whether reallocation is always productivity enhancing. It may be that imperfect competition or other barriers to competitive environments imply that the reallocation process is not fully efficient in these countries.
The Effect of Structural Reforms on Productivity and Profitability Enhancing Reallocation: Evidence from ColombiaMarcela Eslava, John C. Haltiwanger, Adriana Kugler, and Maurice Kugler ,
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Journal of Development Economics
The Effect of Structural Reforms on Productivity and Profitability Enhancing Reallocation: Evidence from Colombia