Market Shock, Factor Allocation Distorting and Productivity Loss
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| Title | Market Shock, Factor Allocation Distorting and Productivity Loss
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| Author | Su Qilin, Zhao Yongliang and Yang Zihui |
| Organization | College of Economics, Jinan University; Sun yat-sen University |
| Email | dgjnuyjy@126.com；ericjue@sohu.com；z_hyoung@yahoo.com.cn |
| Key Words | Market Shock; Reversed adjustment; distorted allocation; Productivity |
| Abstract | Market uncertainty can lead to distortion in the firm’s allocation of labor and result into productivity loss. This paper first divides the sample export firms into four groups by their sale order in both domestic and foreign market. And by making Blinder-Oaxaca regressions, we find when labor allocation distortion happen, there will be a larger productivity loss for the firms with synchronous growth in domestic & foreign sale orders than those with decreasing orders, which mean a significant market opportunity loss. The allocation distortion will result into more productivity loss in export-oriented firms, which includes the loss of learning-by-exporting and the loss of variety gain. In addition to the information insufficient, less-developed labor&product market causes labor adjustment lag and factor allocation distortion, and lowers the TFP of exporters. |
| Serial Number | WP840 |
| Time | 2015-03-20 |
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