Misallocation Of Resources Research Articles

How can technology and efficiency alleviate the dilemma of economic growth and carbon emissions in China's industrial economy? A meta-frontier decoupling decomposition analysis

This paper attempts to explore the decoupling relationship and its drivers between industrial economic increase and energy-related CO2 emissions (ICE). Firstly, the decoupling relationship was evaluated by Tapio index. Then, based on the DEA meta-frontier theory framework which taking into account the regional and industrial heterogeneity and index decomposition method, the driving factors of decoupling process were explored mainly from the view of technology and efficiency. The results show that during 2000–2019, weak decoupling was the primary state. Investment scale expansion was the largest reason hindering decoupling process of industrial increase from ICE. Both energy saving and production technology achieved significant progress, which facilitated the decoupling process. Simultaneously, the energy technology gap and production technology gap among regions have been narrowed, and played a role in promoting decoupling process. On the contrary, both scale economy efficiency and pure technical efficiency have inhibiting effects on decoupling process. The former indicates that the scale economy of China's industry was not conducive to improve energy efficiency and production efficiency, while the latter indicates that resource misallocation problem may exist in both energy market and product market.

Impact of strategies to mitigate misinformation in diverse settings and populations: a protocol for a living evidence synthesis

IntroductionMisinformation refers to inadvertent misleading information that the public may be exposed and share without intent to cause harm, and can delay or prevent effective care, affect mental health, lead...

Misallocation of debt and aggregate productivity

We propose an accounting framework that maps the dispersion of borrowing costs along the debt maturity structure to the misallocation of productive resources. Specifically, we decompose the effects of credit misallocation into two distinct channels: limited access to debt finance (the scale effect) and distortion in the composition of debt across maturities (the composition effect). Our estimates suggest that an efficient allocation of debt could increase TFP by approximately 14.4% in the US manufacturing sector, of which roughly 10% is attributable to the composition of debt. Reducing inefficiencies in the composition of debt would result in TFP losses due to access and composition of factor inputs being reduced by 9.7% and 0.4%, respectively.

Interconnectedness between land resource misallocation and environmental pollution: Exploring the sustainable development potential in China

The link between land resource misallocation and environmental quality is a compelling motivation for addressing the challenges posed by rapid urbanization. As cities expand and populations grow, the demand for land resources intensifies, leading to a misallocation between available land resources and urban development requirements. Therefore, using a panel fixed-effects model, this study explores the impact of land resources misallocation (LRM) on environmental pollution (EP) using 267 prefecture-level city data from 2011 to 2020. Our findings show that LRM significantly increases EP with a time lag effect. LRM increases the number of urban industrial enterprises and thus increases EP. Implementing the broadband China strategy negatively moderates the positive relationship between LRM and EP. There is a threshold effect of LRM on EP, which is more evident in cities with high levels of EP. The promotion effect of LRM on EP will be more evident in southern cities, cities with smaller population sizes and cities with lower digitalization levels. This study clarifies the mechanism between LRM in EP and the active role of broadband China strategy, which has important practical significance for promoting government personnel in optimizing land resource allocation to achieve green development.

Local government debt, resource misallocation, and green total factor productivity in China

Although China has implemented numerous environmental governance polices to realize green development, no significant changes have been achieved in reality. To understand the underlying reasons, we relate green development to the debt-driven model by the local government. Using the total debt data of prefecture-level cities in China from 2007 to 2013, we analyze the effects of debt expansion through a two-way fixed effect model. Results imply that the expansion of local government debt will inhibit green total factor productivity, but there are differences between long-term and short-term debts. Further analysis shows that local government debt will affect capital misallocation and also finds that an increase in local government debt will increase urban carbon emissions. This study recommends that the Chinese government should further decrease debt size and improve investment effectiveness to achieve high-quality development.

Productivity loss and misallocation of resources in Southeast Asia

This article examines within-sector resource misallocation in three Southeast Asian countries—Indonesia, Malaysia, and Vietnam. The methodology accounts for measurement error in revenues and costs. The firm-level evidence suggests that measurement error is substantial, resulting in an overestimation of misallocation by as much as 30%. Nevertheless, resource misallocation across firms within a sector remains large, albeit declining. The findings imply that there are considerable potential gains from efficient reallocation—above 80% for Indonesia and around 20% to 30% for Malaysia and Vietnam. Private domestic firms and firms with higher productivity appear to face larger distortions that prevent them from expanding.

Resource Misallocation and Firm Dynamics: The Case of DRAM Industry in Taiwan

Resource Misallocation and Firm Dynamics: The Case of DRAM Industry in Taiwan

The Trouble with Child Poverty.

In research, in policy, and in the media, there is a clear focus on alleviating child poverty. Child poverty is cast as an urgent societal problem, in part reflecting recognition of the impact of early life circumstances on health across the life course. However, focusing on child poverty can have unintended consequences. First, calls to alleviate child poverty position children as a worthy investment in future population health, while adult poverty is represented as a misallocation of scarce resources. Second, children are positioned as blameless in talk about child poverty, whereas adults are viewed as potentially blameworthy for living in poverty. This ignores the ways early poverty shapes opportunities throughout the life course. These accounts are inconsistent: if a childhood of poverty shapes long-term outcomes, then poverty in adulthood cannot be an individual failing. Building arguments for poverty alleviation on social investment and personal responsibility ultimately supports rather than undermines the social structural arrangements that entrench inequalities. Recognizing the interconnectedness of families and communities and the destructiveness of poverty at every point in the life course has the potential to improve health in a way that can never be achieved by focusing solely on child poverty.

Temporal and spatial patterns, efficiency losses and impact factors of energy mismatch in China under environmental constraints

Given the evident spatial disparity in China's energy consumption and economic development, achieving Pareto optimization of regional energy allocation efficiency proves to be a formidable challenge. Based on this, this paper ingeniously proposed an extended “labor-capital-energy-environment” resource mismatch mode, using 2004–2018 provincial panel data to measure and analyze the spatiotemporal pattern of China's energy mismatch and efficiency loss, while further investigating influencing factor. The results show that: (1) Although the degree of resource misallocation has decreased, the reduction of the number of provinces with excessive energy allocation and the serious shortage of energy allocation are the only effects of the optimization of energy resource misallocation, which has not significantly improved the situation overall. (2) Energy resource misallocation has grown to be a significant factor in China's losses in green total factor productivity (GTFP) brought on by resource misallocation. In addition, the extent of energy mismatch's loss in GTFP demonstrates the spatial heterogeneity of the “eastern > central > northeast > west” region. (3) Environmental regulation can significantly reduce energy mismatch and it is more successful at addressing the issue of excess energy than inadequate energy allocation. Also, the “rebound effect” of technological progress is the main factor aggravating the shortage of energy allocation.

Resource Allocation Capability and Routines in Multibusiness Firms

Research suggests that multibusiness firms often misallocate financial resources. However, research also suggests that firms differ in how effectively they allocate a range of resources. We argue that some firms have a resource allocation capability that enables them to more effectively determine the allocation of resources than often portrayed in the literature. We identify key search and selection routines that form the building blocks of a resource allocation capability and explain how these routines facilitate critical activities at different levels of the management hierarchy that are involved in the determination of resource allocations, including for related and vertically linked businesses. We further explain how a resource allocation capability, and the routines that make up the capability, help firms allocate resources effectively to meet their strategic and financial objectives. Part of the improved effectiveness of resource allocation arises because the routines help to mitigate the factors that prior research has identified as leading to resource misallocation, namely information asymmetry and distortion, internal politics, and cognitive biases and backward-looking aspirations. Finally, we move beyond research on whether firms effectively allocate resources to explain why resource allocation capabilities are likely be heterogeneous among firms due to differences in their routines and the ways that firms structure their use of routines. This heterogeneity stems in part from tradeoffs that firms face when choosing among resource allocation routines. As a result, firms are likely to vary in how effectively they allocate resources, leading to heterogeneity in firm adaptation and change and ultimately in firm performance.

Unraveling the rectifying role of transportation improvement on resource misallocation among manufacturing firms in China-Facts and mechanism.

China's High-speed railway (HSR) network had experienced rapid expansion during 2009 to 2013, and how the HSR expansion affects China's economy has been considerable concerned by both policymakers and researchers. Using firm-level data, this study accessed the effects of HSR on productivity distribution and resource misallocation among manufacturing firms. Incorporating difference in difference idea into a multilevel model, the results suggest significant misallocation rectifying effect of HSR at firm level. This effect is stronger for capital-intensive firms. City-specific analysis indicates that the effects of HSR on firm-level resource misallocation varies with city size, and firms grouped in small cities gain more misallocation rectification than those grouped in big and medium cities. Market potential, which is an important way through which the HSR affects efficient allocation of production resources, is found boost the marginal effect of HSR by reducing labor market segmentation and increasing agglomeration.

Local government competition, decision‐making behavior, and green land use total factor productivity: Evidence from cities in China

AbstractLand is a finite and non‐renewable natural resource. The competitive decisions of local governments will have a profound impact on the green and efficient use of land resources. This paper examines the nonlinear effect of local government competition on green land use total factor productivity (GLTFP) using data from 171 Chinese cities from 2006 to 2019. The results show that (1) there is an inverted U‐shaped relationship between the local government competition and GLTFP, and this conclusion holds after addressing a series of endogeneity concerns. (2) Local government competition can affect the inverted U‐shaped relationship between GLTFP through the misallocation of land resources. (3) The impact of local government competition on GLTFP is more prominent in first‐tier and new first‐tier cities in China and cities in western China.

Un-Incorporation and Conditional Misallocation: Firm-Level Evidence from Sri Lanka

Abstract Un-incorporated firms are usually found less productive than their incorporated counterparts. However, little is known about the misallocation conditional on firms’ incorporation status and their productivity. This paper investigates the resource misallocation across un-incorporated firms and gauges the consequent aggregate productivity loss in comparison with their incorporated counterparts. We examine the question by using firm-level survey data from Sri Lanka’s manufacturing sector for 2005–2017 that provide unique information about firms’ corporation status. Our findings suggest that misallocation is more severe in unincorporated firms than in incorporated ones, leading to extra 42 % aggregate TFP loss to the former. By comparing the sources of misallocation between the two types of firms, we find capital is more misallocated relative to output and there is a stronger positive correlation between firm-specific distortion and productivity across the unincorporated firms. Our findings suggest that the un-incorporated firms suffer additional productivity loss at the aggregate level due to misallocation.

The impact of corruption on investment and financing in the European Union: new insights

Corruption is a phenomenon that is not just restricted to less developed nations, but also touches developed countries like those in the European Union, often seen as one of the least corrupt economic areas in the world. Corruption practices and perceptions can seriously hinder economic growth and innovation, This can be due to lower access to corporate funding, greater cost of capital, its effects on competition, misallocation of resources, and distortions in the composition of public spending and the effectiveness of government policies. This paper first provides a short discussion and an overview of some academic literature on the link between corruption, financing decisions and economic growth. It then summarizes the findings of the five papers in this special issue on the topic of Corruption in a European context, discusses some insights from their results and finally points out at some avenues for future research in related topics.

How to Use Microdata for Macro-Finance

Financial frictions generate misallocation of resources across firms by restricting productive firms’ access to capital. This article reviews the literature that estimates the aggregate losses generated by such misallocation. The first approach relies on structural estimations: A model of firm dynamics with financial frictions is typically estimated and used to compare efficiency in the actual economy with a counterfactual with perfect financial markets. We argue that robustness is a central concern for this structural literature and discuss ways to analyze robustness in structural estimation (using well-identified moments and analyzing sensitivity to moments). The second approach relies on sufficient statistics, namely formulas that measure misallocation using simple empirical statistics and that are valid for a class of models. We discuss key contributions in that space, the generality of this approach, and the conditions under which it is valid. Sufficient statistic approaches are simpler and more robust, but they come at a cost: The range of counterfactual analyses that can be explored is more limited.

Security challenges in civil registration: safeguarding vital information in an evolving landscape

Civil registration is a fundamental process that captures vital events such as births, deaths, marriages, and divorces, enabling governments to create accurate demographic databases and deliver essential services to their citizens. However, in today's digital age, civil registration systems face numerous security challenges that jeopardize the integrity and confidentiality of vital information. This paper highlights some of the key security challenges encountered in civil registration systems and outlines potential strategies to address them. Firstly, the digitization of civil registration processes has opened new avenues for cyber threats. Malicious actors may attempt to compromise the security of databases, manipulate or steal vital records, or disrupt services through cyberattacks. Robust cybersecurity measures, including encryption, firewalls, intrusion detection systems, and regular security audits, are essential to safeguard sensitive data and ensure the continuity of civil registration operations. Secondly, the issue of identity theft poses a significant challenge to civil registration security. Fraudulent practices, such as the creation of fake identities or the alteration of existing records, can undermine the trustworthiness of the system and lead to the misallocation of resources. The implementation of identity verification mechanisms, such as biometrics or unique identifiers, can enhance the accuracy and integrity of civil registration data while reducing the risk of identity fraud. Thirdly, ensuring the privacy and confidentiality of individuals' personal information is critical in civil registration systems. With the increasing digitization and interconnectedness of data, there is a heightened risk of unauthorized access or data breaches. Strong data protection regulations, robust access controls, and encryption techniques can help mitigate these risks, fostering public trust and confidence in civil registration processes. Moreover, the challenge of inclusivity must be addressed to ensure the effectiveness and reliability of civil registration systems. Marginalized populations, including refugees, migrants, and those residing in remote areas, may face barriers in accessing civil registration services, leaving them vulnerable to identity-related challenges. Deploying mobile registration units, leveraging innovative technologies, and promoting community engagement are strategies that can improve inclusivity and extend the benefits of civil registration to all individuals.

Study on the effect of capital reallocation and dynamic characteristics of listed companies in China

ABSTRACT This study investigates the capital reallocation effect and its dynamic characteristics in China. A theoretical model was constructed to measure the capital reallocation effect based on the transmission logic framework of resource misallocation – resource reallocation – total factor productivity (TFP). Our empirical results show that capital reallocation of listed companies negatively deviated from zero with prevalent capital misallocation. In addition, the correct allocation of capital does not always correspond to an increase in economic efficiency. We also find evidence that the effect of capital reallocation varies with the nature, scale and industry of companies.

Resource misallocation and unbalanced growth in green total factor productivity in Chinese agriculture

We measure the regional gaps in green total factor productivity (GTFP) growth by using the Dagum’s Gini coefficient based on panel data for 306 cities from 1996 to 2017, then adopt a geographical detector to test the contribution of resource misallocation to the unbalanced growth in GTFP. The results show that Chinese agricultural GTFP continues to grow, but the overall growth gap has expanded year by year, mainly due to the inter-provincial gap. Compared with land, labor and machinery, fertilizer misallocation is the main factor driving the unbalanced growth in GTFP. Moreover, the interaction contribution of fertilizer misallocation with any one resource misallocation is higher than that in a single factor. Finally, resource misallocation also leads to unbalanced growth in technological progress and technical efficiency, but more so for the latter. Our research helps to provide a new solution to the “dilemma” of food security and ecological security from the perspective of optimizing resource allocation.

Does green credit really increase green technology innovation?

Considering China's green credit policy (GCP) as a quasi-natural experiment, this study discusses the effect of GCP on enterprise green innovation (GI) using a difference-in-difference method based on data from Chinese listed companies from 2009 to 2020. The results indicate that green credit enhances the strategic GI of heavy polluters while significantly inhibiting essential GI, thus suggesting the nonexistence of the Porter effect. In addition, the inhibition effect is attributed to an increase in financing constraints and a reduction in government subsidies, firm research and development investment, and employment scale. This disincentive effect is particularly pronounced in privately owned firms, small cities, and capital-intensive low-profitability firms. Resource misallocation caused by the GCP fails to stimulate the green transformation of heavily polluting industries through the Porter effect. Hence, governments should establish a diversified green financial system, integrate green venture capital and GI elements, and guide the flow of social capital toward green industries.

COVID-19 pandemic and corporate liquidity: The role of SOEs’ trade credit response

Although state-owned enterprises are associated with less efficiency and lead to resource misallocation, they may have stabilizing effect in face of a crisis. Exploiting the COVID-19 pandemic as a natural experiment, we study the role of firm ownership in trade credit provision and find robust evidence that SOEs increase their trade credit to downstream firms more than non-SOEs after the outbreak of the pandemic. Moreover, we explore the underlying mechanism and find that better financing ability and multitask of the SOEs contribute to greater trade credit during the pandemic, and the latter plays a more active role. Further analyses show that SOEs’ advantage in trade credit extension is more pronounced in industries with higher external financial dependence and provinces with a higher level of government involvement. Our paper provides new insights into the real effects of SOEs on the economy.