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Firm-Level Input Distortion in Indian States (English)

This paper measures trends in factor misallocation in India between 1999 and 2014, using data from a rich panel of Indian firms. The misallocation of a factor is modeled as an adjustment cost, that is, an implicit variable cost incurred by a firm when using that factor. Trends in the adjustment cost are estimated using a new adaptation of the firm-level cost-minimization approach. The paper documents these trends for four factors of production (permanent...
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Chaurey,Ritam; Manghnani,Ruchita; Perego,Viviana Maria Eugenia; Sharma,Siddharth.

Firm-Level Input Distortion in Indian States (English). Policy Research working paper ; no. WPS 10048 Washington, D.C. : World Bank Group. http://documents.worldbank.org/curated/en/099535305172211094

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