We investigate the role of dynamic production inputs and their associated adjustment costs in shaping the dispersion of static measures of capital misallocation within industries ðand countriesÞ. Across nine data sets spanning 40 countries, we find that industries exhibiting greater time-series volatility of productivity have greater cross-sectional dispersion of the marginal revenue product of capital. We use a standard investment model with adjustment costs to show that variation in the volatility of productivity across these industries and economies can explain a large share ð80-90 percentÞ of the cross-industry ðand cross-countryÞ variation in the dispersion of the marginal revenue product of capital.

We estimate the effects of electricity shortages on Indian manufacturers, instrumenting with supply shifts from hydroelectric power availability. We estimate that India's average reported level of shortages reduces the average plant's revenues and producer surplus by 5 to 10 percent, but average productivity losses are significantly smaller because most inputs can be stored during outages. Shortages distort the plant size distribution, as there are significant economies of scale in generator costs and shortages more severely affect plants without generators. Simulations show that offering interruptible retail electricity contracts could substantially reduce the impacts of shortages. (JEL D24, L60, L94, O13, O14, Q41)In this paper, we ask: How do electricity shortages affect input choices, revenue, and productivity in the Indian manufacturing sector? One potential prior is that because electricity is an essential input-most factories cannot produce anything without electricity for lights, motors, and machines-shortages could significantly reduce output. On the other hand, many firms might insure themselves against outages by purchasing generators or otherwise substituting away from grid electricity precisely because the potential losses are so large. The limited existing evidence could support either argument. Foster and Steinbuks (2009) and others argue that the cost of self-generation is relatively small, and Alam (2013) and Fisher-Vanden, Mansur, and Wang (2015) highlight ways in which plants substitute away from

We measure the impact of a drastic new technology for producing steel-the minimill-on industry-wide productivity in the US steel industry, using unique plant-level data between 1963 and 2002 Identifying the sources of productivity growth of firms, industries, and countries, has been a central question for economic research. There remain, however, many empirical obstacles to credibly identifying the underlying sources of productivity growth. First, the measurement of productivity at the producer level typically requires an estimate of the production function and, therefore, has to confront both the endogeneity of inputs and unobserved prices for inputs and outputs. Second, it is difficult to observe potential explanatory variables at the producer level, such as technology, competition, and management practices.1 Finally, in order to establish causality, exogenous shifters of such variables are required in order to trace out their effects on productivity.1 See Syverson (2011) for an excellent overview of the various potential determinants of productivity at both the producer and the industry level. Two prominent studies on the triggers of productivity growth are Schmitz (2005) and Olley and Pakes (1996) who study the role of two such triggers: import competition in the iron ore market and deregulation in the telecommunications market. Hortaçsu and Syverson (2007); Bloom, Eifert, Mahajan, McKenzie, and Roberts (2013); and Jarmin, Klimek, and Miranda (2009) show that factors such as vertical integration, management, and large retail chains lead to systematic differences in productivity between plants and, consequently, have implications for aggregate industry performance. * Collard-Wexler: Economics Department, Duke University, 233 Social Sciences, Durham, NC 27708 (e-mail: collardwexler@gmail.com); De Loecker: Economics Department, Princeton University, Fisher Hall, Princeton, NJ 08540 (e-mail: jdeloeck@princeton.edu). We would like to thank Jun Wen for excellent research assistance, and Jonathan Fisher for conversations and help with census data. We would like to thank three anonymous referees for excellent comments and suggestions. Furthermore, we thank Nick Bloom, Rob Clark, Liran Einav, Ariel Pakes, Kathryn Shaw, Chad Syverson, Raluca Dragusanu, and seminar participants at many institutions.

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In this paper we study mergers in two-sided industries and, in particular, the effects of mergers in the newspaper industry. We present a model which shows that mergers in two-sided markets may not necessarily lead to higher prices for either side of the market. We test our conclusions by examining a spate of mergers in the Canadian newspaper industry in the late 1990s. Specifically, we analyze prices for both circulation and advertising to try to understand the impact that these mergers had on consumer welfare. We find that greater concentration did not lead to higher prices for either newspaper subscribers or advertisers.JEL Code: L82, L41.2