The Size and Life-cycle Growth of Plants: The Role of Productivity, Demand and Wedges
We develop a framework that uses price and quantity information on both establishments' outputs and inputs to assess the roles, on establishment dynamics and welfare, of technical efficiency, input prices, demand/quality, idiosyncratic markups, and residual wedges. Our strategy nests previous approaches limited by data availability. In our application, demand/quality is found to dominate the cross sectional variability of sales and sales growth, while quality-adjusted input prices and residual wedges play dampening roles, especially at birth. Markups play only a modest role for cross-sectional variability of sales and sales growth but are important in explaining welfare losses from revenue productivity dispersion.
Published Versions
Marcela Eslava & John Haltiwanger & Nicolas Urdaneta, 2024. "The Size and Life-Cycle Growth of Plants: The Role of Productivity, Demand, and Wedges," Review of Economic Studies, vol 91(1), pages 259-300. citation courtesy of 
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