The Size Distribution of Manufacturing Plants and Development:
The typical size distribution of manufacturing plants in developing countries has a thick left tail compared to developed countries. The same holds across Indian states, with richer states having a much smaller share of their manufacturing employment in small plants. In this paper, I explore the hyp...
Gespeichert in:
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| Format: | Elektronisch E-Book |
| Sprache: | English |
| Veröffentlicht: |
Washington, D.C
International Monetary Fund
2014
|
| Schriftenreihe: | IMF Working Papers: Working Paper No. 14 / 236
|
| Online-Zugang: | UBW01 UEI01 LCO01 SBR01 UER01 SBG01 UBG01 FAN01 UBT01 FKE01 UBY01 UBA01 FLA01 UBM01 UPA01 UBR01 FHA01 FNU01 BSB01 TUM01 Volltext |
| Zusammenfassung: | The typical size distribution of manufacturing plants in developing countries has a thick left tail compared to developed countries. The same holds across Indian states, with richer states having a much smaller share of their manufacturing employment in small plants. In this paper, I explore the hypothesis that this income-size relation arises from the fact that low income countries and states have high demand for low quality Products which can be produced efficiently in small plants. I provide evidence which is consistent with this hypothesis from both the consumer and producer side. In particular, I show empirically that richer households buy higher price goods while larger plants produce higher price Products (and use higher price inputs). I develop a model which matches these cross-sectional facts. The model features non-homothetic preferences with respect to quality on the consumer side. On the producer side, high quality Production has higher marginal costs and requires higher fixed costs. These two features imply that high quality producers are larger on average and charge higher prices. The model can explain about forty percent of the cross-state variation in the left tail of manufacturing plants in India |
| Beschreibung: | 1 Online-Ressource (60 p) |
| ISBN: | 1498334393 9781498334396 |
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| index_date | 2024-07-03T20:13:36Z |
| indexdate | 2024-07-10T09:35:46Z |
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| record_format | marc |
| series2 | IMF Working Papers: Working Paper No. 14 / 236 |
| spelling | Kothari, Siddharth Verfasser aut The Size Distribution of Manufacturing Plants and Development Kothari, Siddharth Washington, D.C International Monetary Fund 2014 1 Online-Ressource (60 p) txt rdacontent c rdamedia cr rdacarrier IMF Working Papers: Working Paper No. 14 / 236 The typical size distribution of manufacturing plants in developing countries has a thick left tail compared to developed countries. The same holds across Indian states, with richer states having a much smaller share of their manufacturing employment in small plants. In this paper, I explore the hypothesis that this income-size relation arises from the fact that low income countries and states have high demand for low quality Products which can be produced efficiently in small plants. I provide evidence which is consistent with this hypothesis from both the consumer and producer side. In particular, I show empirically that richer households buy higher price goods while larger plants produce higher price Products (and use higher price inputs). I develop a model which matches these cross-sectional facts. The model features non-homothetic preferences with respect to quality on the consumer side. On the producer side, high quality Production has higher marginal costs and requires higher fixed costs. These two features imply that high quality producers are larger on average and charge higher prices. The model can explain about forty percent of the cross-state variation in the left tail of manufacturing plants in India Online-Ausg http://elibrary.imf.org/view/IMF001/22219-9781498334396/22219-9781498334396/22219-9781498334396.xml Verlag URL des Erstveröffentlichers Volltext |
| spellingShingle | Kothari, Siddharth The Size Distribution of Manufacturing Plants and Development |
| title | The Size Distribution of Manufacturing Plants and Development |
| title_auth | The Size Distribution of Manufacturing Plants and Development |
| title_exact_search | The Size Distribution of Manufacturing Plants and Development |
| title_exact_search_txtP | The Size Distribution of Manufacturing Plants and Development |
| title_full | The Size Distribution of Manufacturing Plants and Development Kothari, Siddharth |
| title_fullStr | The Size Distribution of Manufacturing Plants and Development Kothari, Siddharth |
| title_full_unstemmed | The Size Distribution of Manufacturing Plants and Development Kothari, Siddharth |
| title_short | The Size Distribution of Manufacturing Plants and Development |
| title_sort | the size distribution of manufacturing plants and development |
| url | http://elibrary.imf.org/view/IMF001/22219-9781498334396/22219-9781498334396/22219-9781498334396.xml |
| work_keys_str_mv | AT kotharisiddharth thesizedistributionofmanufacturingplantsanddevelopment |