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other
Publication Year:
2014
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Relative Underperformance Alla Turca
(with Diego Restuccia)
American Economic Review , 2014, 104(6), 1667-97
Abstract: We study the determinants of di fferences in farm-size across countries and their impact on agricultural and aggregate productivity using a quantitative sectoral model featuring a distribution of farms. Measured aggregate factors (capital, land, economy-wide productivity) account for ¼ of the observed differences in farm size and productivity. Policies and institutions that misallocate resources across farms have the potential to account for the remaining diff erences. Exploiting within-country variation in crop-specifi c price distortions and their correlation with farm size, we construct a cross-country measure of farm-size distortions which together with aggregate factors accounts for ½ of the cross-country diff erences in size and productivity.
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