Import License, Misallocation, and Aggregate Total Factor Productivity in the Chinese Steel Industry*
研究中国钢铁行业因铁矿石进口许可证导致的资源错配对行业全要素生产率的影响，发现取消该贸易壁垒可使行业全要素生产率平均提高76.8%。
This paper examines how import license restriction‐induced resource misallocation affects industry aggregate total factor productivity (TFP). We apply a recently proposed consistent estimator to micro‐level data from the Chinese steel industry, considering material price heterogeneity. We back out the potential extent of misallocation, finding the importers' TFP is not significantly higher than that of the nonimporters, and resource misallocation caused by the iron‐ore import license lowers aggregate productivity. Our analysis indicates that removing the trade barrier counterfactually would increase the industrial TFP by 76.8%, on average.