Data and Code for: Distortions, Producer Dynamics, and Aggregate Productivity: A General Equilibrium Analysis

In less developed economies the allocation of factor inputs to more productive farms is often hindered. To analyze how distortions to factor reallocation affect farm dynamics and agricultural productivity, we develop a model of heterogeneous farms that invest in productivity improvements. We calibrate the model using detailed farm-level panel data from Vietnam, exploiting regional differences in agricultural institutions and outcomes. We focus on south Vietnam and quantify the effect of higher measured distortions in the North on farm choices and agricultural productivity. We find that the higher distortions in north Vietnam reduce agricultural productivity by 38%, accounting for 55% of the observed 2.5-fold difference between regions. Moreover, around two-thirds of the productivity loss is driven by farms' reductions in productivity-enhancing investment, which more than doubles the productivity loss from static misallocation.<br>