Working Paper Revision
Scalable versus Productive Technologies
Abstract: CORRECT ORDER OF AUTHORS: Hubmer, Chan, Ozkan, Salgado, Hong. Are larger firms more productive, more scalable, or both? We use firm-level panel data from thirteen countries and employ a broad set of methods to estimate factor elasticities---capturing returns to scale (RTS)---and total factor productivity (TFP). We find substantial RTS heterogeneity within industries, with larger firms exhibiting higher RTS driven by greater intermediate input elasticities. TFP, by contrast, rises with firm size only up to the top decile before declining. Incorporating RTS heterogeneity into a standard model of entrepreneurship more than doubles the efficiency losses from financial frictions compared with a conventional calibration with only TFP differences.
JEL Classification: E22; E23; D24; L11;
https://doi.org/10.20955/wp.2024.019
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Bibliographic Information
Provider: Federal Reserve Bank of St. Louis
Part of Series: Working Papers
Publication Date: 2025-05-06
Number: 2024-019
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