{"status":"ok","message-type":"work","message-version":"1.0.0","message":{"indexed":{"date-parts":[[2026,9,25]],"date-time":"2026-09-25T17:06:15Z","timestamp":1790355975122,"version":"4.1.0"},"reference-count":27,"publisher":"Wiley","issue":"3","license":[{"start":{"date-parts":[[2026,1,21]],"date-time":"2026-01-21T00:00:00Z","timestamp":1768953600000},"content-version":"vor","delay-in-days":0,"URL":"http:\/\/onlinelibrary.wiley.com\/termsAndConditions#vor"},{"start":{"date-parts":[[2026,1,21]],"date-time":"2026-01-21T00:00:00Z","timestamp":1768953600000},"content-version":"tdm","delay-in-days":0,"URL":"http:\/\/doi.wiley.com\/10.1002\/tdm_license_1.1"}],"funder":[{"DOI":"10.13039\/501100001809","name":"National Natural Science Foundation of China","doi-asserted-by":"publisher","award":["72103001"],"award-info":[{"award-number":["72103001"]}],"id":[{"id":"10.13039\/501100001809","id-type":"DOI","asserted-by":"publisher"}]},{"DOI":"10.13039\/501100001809","name":"National Natural Science Foundation of China","doi-asserted-by":"publisher","award":["72373168"],"award-info":[{"award-number":["72373168"]}],"id":[{"id":"10.13039\/501100001809","id-type":"DOI","asserted-by":"publisher"}]}],"content-domain":{"domain":["onlinelibrary.wiley.com"],"crossmark-restriction":true},"short-container-title":["J of Applied Econometrics"],"published-print":{"date-parts":[[2026,4]]},"abstract":"<jats:title>ABSTRACT<\/jats:title>\n                  <jats:p>We show that the proxy variable method fails to yield consistent estimates of production function coefficients in the presence of resource misallocation. This failure arises because unobserved firm\u2010specific distortions violate the assumptions of scalar unobservability and strict monotonicity. We propose a novel identification strategy that does not rely on these assumptions. Our method is robust to various distortions and production function specifications, and can be extended to accommodate serial correlation in unexpected productivity shocks. Monte Carlo experiments confirm the efficacy of our approach in consistently estimating production function coefficients under resource misallocation. Using a large panel of Chinese manufacturing firms\u2014and employing the share of state\u2010owned firms as a proxy for industry\u2010level resource misallocation\u2014we find that estimates obtained via the proxy variable method more closely align with those from our proposed approach when resource misallocation is reduced.<\/jats:p>","DOI":"10.1002\/jae.70043","type":"journal-article","created":{"date-parts":[[2026,1,21]],"date-time":"2026-01-21T14:19:53Z","timestamp":1769005193000},"page":"280-294","update-policy":"https:\/\/doi.org\/10.1002\/crossmark_policy","source":"Crossref","is-referenced-by-count":2,"title":["Production Function Estimation With Resource Misallocation"],"prefix":"10.1002","volume":"41","author":[{"given":"Shigang","family":"Li","sequence":"first","affiliation":[{"name":"International School of Business and Finance Sun Yat\u2010sen University  Guangzhou China"}],"role":[{"vocabulary":"crossref","role":"author"}]},{"given":"Jiawei","family":"Mo","sequence":"additional","affiliation":[{"name":"School of Economics Peking University  Beijing China"}],"role":[{"vocabulary":"crossref","role":"author"}]}],"member":"311","published-online":{"date-parts":[[2026,1,21]]},"reference":[{"key":"e_1_2_12_2_1","doi-asserted-by":"publisher","DOI":"10.3982\/ECTA13408"},{"key":"e_1_2_12_3_1","doi-asserted-by":"publisher","DOI":"10.1016\/j.jeconom.2023.04.007"},{"key":"e_1_2_12_4_1","doi-asserted-by":"publisher","DOI":"10.1086\/677072"},{"key":"e_1_2_12_5_1","doi-asserted-by":"publisher","DOI":"10.1016\/j.jmoneco.2021.09.004"},{"key":"e_1_2_12_6_1","doi-asserted-by":"publisher","DOI":"10.1080\/07474930008800475"},{"key":"e_1_2_12_7_1","doi-asserted-by":"publisher","DOI":"10.1016\/j.red.2012.10.002"},{"key":"e_1_2_12_8_1","doi-asserted-by":"publisher","DOI":"10.1257\/aer.20121266"},{"key":"e_1_2_12_9_1","doi-asserted-by":"publisher","DOI":"10.1016\/j.jdeveco.2011.02.002"},{"key":"e_1_2_12_10_1","unstructured":"David J. 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