Río Iglesias, Fernando delRodríguez Sampayo, Antonio2025-01-102025-01-102017-08-16https://hdl.handle.net/10347/38491This is the peer reviewed version of the following article: Fernando del Rio, Antonio Sampayo. Complementarity, Linkages between Firms, and the Effect of Entry Costs on Productivity. Rev Dev Econ. 2017; 21: 1281–1304, which has been published in final form at https://doi.org/10.1111/rode.12339. This article may be used for non-commercial purposes in accordance with Wiley Terms and Conditions for Use of Self-Archived Versions. This article may not be enhanced, enriched or otherwise transformed into a derivative work, without express permission from Wiley or by statutory rights under applicable legislation. Copyright notices must not be removed, obscured or modified. The article must be linked to Wiley’s version of record on Wiley Online Library and any embedding, framing or otherwise making available the article or pages thereof by third parties from platforms, services and websites other than Wiley Online Library must be prohibited.In a general equilibrium model where firms are heterogeneous in terms of productivity, we introduce differentiated goods in production that are not perfect substitutes, as well as intermediate inputs needed to produce those goods. We show that an increase in either the complementarity of differentiated goods or the share of intermediate inputs in gross output, significantly increases the negative effect of entry costs on total factor productivity (TFP) and output per worker. We also find that the effect of complementarity is quantitatively stronger. If we assume an empirically plausible value for the elasticity of substitution between differentiated goods, then the model considerably improves its ability to reproduce the observed negative relationship between entry costs and TFP or output per worker.eng530713 Teoría de la inversión530714 Teoría macroeconómicajournal article10.1111/rode.12339open access