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Resource misallocation and total factor productivity: Manufacturing firms in South Africa

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  • Carol Newman
  • John Rand
  • Mpho Tsebe

Abstract

Misallocation of labour and capital can greatly reduce aggregate productivity. In this study, we use tax administrative data to examine the extent of resource misallocation in the South African context. In addition, we zoom in on how different government incentives affect the allocation (or misallocation) of capital and labour across firms, and we quantify the extent to which alleviating these policy-induced distortions would improve productivity for the manufacturing sector in South Africa.

Suggested Citation

  • Carol Newman & John Rand & Mpho Tsebe, 2019. "Resource misallocation and total factor productivity: Manufacturing firms in South Africa," WIDER Working Paper Series wp-2019-46, World Institute for Development Economic Research (UNU-WIDER).
    • Handle: RePEc:unu:wpaper:wp-2019-46
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    References listed on IDEAS

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    Cited by:

    1. BAH, Mamadou Mouminy, 2021. "Agglomeration Economies and Labour Misallocation in Cote d’Ivoire," MPRA Paper 109314, University Library of Munich, Germany.
    2. Chen, Guowen & Herrera, Ana María & Lugauer, Steven, 2022. "Policy and misallocation: Evidence from Chinese firm-level data," European Economic Review, Elsevier, vol. 149(C).
    3. Bojosi Morule & Konstantin Makrelov, 2019. "The effectiveness of the Employment Tax Incentive August 2019," Occasional Bulletin of Economic Notes 9481, South African Reserve Bank.

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    Keywords

    Resource misallocation; Productivity;

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