Events

CARF Seminar

Thu, Jan 30, 2025

57th CARF Seminar: Aggregating Distortions in Networks with Multi-Product Firms

Date and Time

Thursday, January 30, 2025 10:30 – 12:00

Venue

Seminar Room 3, 2F of Economics Research Annex (Kojima Hall)
The University of Tokyo, Hongo Campus
https://www.carf.e.u-tokyo.ac.jp/access/
https://www.e.u-tokyo.ac.jp/fservice/address/map-e.html

Co-host

Macroeconomics Workshop 2024 (CIRJE)

Speaker

Yasutaka Koike-Mori (University of California, Los Angeles)

Title

Aggregating Distortions in Networks with Multi-Product Firms

Abstract

We investigate the role of multiproduct firms in shaping resource misallocation and its impact on aggregate total factor productivity (TFP) growth. Using administrative data on product transactions between all formal Chilean firms, we provide evidence that demand shocks to one product affect the production of other products within the same firm, suggesting that firms engage in joint production. We develop a framework to measure resource misallocation in production networks with joint production, deriving non-parametric sufficient statistics to quantify these effects. Applying the framework to Chile, we find that reallocation effects explain 86% of the observed aggregate TFP growth for the 2016-2022 period. Ignoring joint production leads to overestimation of resource misallocation.