https://macropaperwarehouse.com/authors/debora-revoltella/Debora RevoltellaHugo -- gohugo.ioen-usThu, 01 Jan 2026 00:00:00 +0000https://macropaperwarehouse.com/papers/resource-misallocation-in-european-firms-the-role-of-constraints-firm-characteristics-and-managerial-decisions/Thu, 01 Jan 2026 00:00:00 +0000https://macropaperwarehouse.com/papers/resource-misallocation-in-european-firms-the-role-of-constraints-firm-characteristics-and-managerial-decisions/<p>This paper investigates why firms in the European Union exhibit wide dispersion in marginal revenue products (MRP) of capital and labor — a direct indicator of resource misallocation — and asks how much aggregate productivity the EU forfeits as a result. The research question is motivated by the persistent productivity gap between the EU and the United States, by evidence that within-country MRP dispersion in Europe has been trending upward since the mid-1990s, and by an institutional context in which the EU single market (launched in 1993) has not eliminated cross-country factor market frictions even three decades later.</p>