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What's in a wedge? Misallocation and taxation in the oil industry

Research output: Working paperDiscussion paper

Author(s)

Radek Stefanski, Gerhard Toews

School/Research organisations

Abstract

Resource misallocation explains a large part of cross-country productivity differences. Measuring differences in marginal revenue products of labor and capital across countries and firms allows for a quantification of the extent of this misallocation, but is typically uninformative of its source. We address this problem by using novel, firm-level data from the oil industry. We confirm the existence of sizeable gaps in marginal revenue products across countries and firms relative to the US, but show that these disappear once we account for revenue taxation. Differences in tax policies are thus sufficient to account for cross-country gaps in marginal products.
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Details

Original languageEnglish
Place of PublicationSt Andrews
PublisherUniversity of St Andrews
Pages1-16
Number of pages16
Publication statusPublished - 1 Oct 2018

Publication series

NameSchool of Economics and Finance Discussion Paper
PublisherUniversity of St Andrews
No.1804
ISSN (Print)0962-4031
ISSN (Electronic)2055-303X

    Research areas

  • Misallocation, Productivity differences, Taxation, Oil

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