Ackerberg, Daniel and Caves, Kevin and Frazer, Garth (2006): Structural identification of production functions.
Download (316Kb) | Preview
This paper examines some of the recent literature on the identi�cation of production functions. We focus on structural techniques suggested in two recent papers, Olley and Pakes (1996), and Levinsohn and Petrin (2003). While there are some solid and intuitive indenti�cation ideas in these papers, we argue that the techniques, particularly those of Levinsohn and Petrin, su¤er from collinearity problems which we believe cast doubt on the methodology. We then suggest alternative methodologies which make use of the ideas in these papers, but do not su¤er from these collinearity problems.
|Item Type:||MPRA Paper|
|Original Title:||Structural identification of production functions|
|Keywords:||Production Functions; Industrial Organization|
|Subjects:||L - Industrial Organization > L1 - Market Structure, Firm Strategy, and Market Performance > L11 - Production, Pricing, and Market Structure; Size Distribution of Firms
D - Microeconomics > D2 - Production and Organizations > D24 - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
|Depositing User:||Daniel Ackerberg|
|Date Deposited:||25. Apr 2012 00:44|
|Last Modified:||12. Feb 2013 09:31|
Ackerberg, D., Benkard, L., Berry, S., and Pakes, A. (2006) "Econometric Tools for Analyzing Market Outcomes", Forthcoming, Handbook of Econometrics
Alvarez, R. and Lopez, R. (2005) "Exporting and Performance: Evidence from Chilean Plants", Canadian Journal of Economics 1384-1400
Anderson T.W. and C. Hsiao (1982) "Formulation and Estimation of Dynamic Models using Panel Data", Journal of Econometrics 18:47-82
Arellano, M. and S. Bond (1991) "Some Tests of Speci�cation for Panel Data: Monte Carlo Evidence and an Application to Employment Equations" The Review of Economic Studies 58:277- 297
Arellano, M. and Bover, O. (1995) �"Another Look at the Instrumental Variable Estimation of Error Components Models", �Journal of Econometrics, 68, 29-51
Bajari, P. and Benkard, L. (2003) �"Demand Estimation with Heterogeneous Consumers and Unobserved Product Characteristics: A Hedonic Approach�", forthcoming, Journal of Political Economy
Basu, S. and J. Fernald (1997) "Returns to Scale in U.S. Production: Estimates and Implications", Journal of Political Economy 105: 249-283
Basu, S. (1999) - Slides for the discussion of Levinsohn and Petrin (1999)
Blalock, G. and Gertler, P. (2004) "Learning from Exporting: Revisited in a Less Developed Setting", Journal of Development Economics
Blundell, R. and Bond, S. (1998) "Initial Conditions and Moment Restrictions in Dynamic Panel Data Models" Journal of Econometrics 87:115-143
Blundell, R. and Bond, S. (2000) �"GMM estimation with persistent panel data: an application to production functions�", Econometric Reviews 19: 321-340
Bond, S. and Söderbom, M. (2005) �"Adjustment Costs and the Identi�cation of Cobb-Douglas Production Functions",�The Institute for Fiscal Studies, Working Paper Series No. 05/04
Buettner, T. (2005) "Productivity Dynamics when Labor is a State Variable", mimeo, LSE
Chamberlain, G. (1982) �"Multivariate Regression Models for Panel Data"�, Journal of Econometrics 18.
Criscuolo, C. and Martin, R. (2003) "Multinationals and U.S. Productivity Leadership: Evidence from Great Britain", mimeo, UCL
Dollar, D., Hallward-Dreimeier, M. and Mengistae, T. (2003) "Investment Climate and Firm Performance in Developing Countries", mimeo
Fernandes, A. (2003) �"Trade Policy, Trade Volumes and Plant-Level Productivity in Colombian Manufacturing Industries",�The World Bank Policy Research Working Paper Series: 3064.
Griliches, Z. and Hausman, J. (1986) �"Errors in Variables in Panel Data", �Journal of Econometrics, 31, 93-118
Griliches, Z. and J:Mairesse. 1998. "�Production Functions: The Search for Identi�cation"� In: Econometrics and Economic Theory in the Twentieth Century: The Ragnar Frisch Centennial Symposium, ed. S. Strøm. Cambridge, UK: Cambridge University Press.
Hardle, W., M. Muller, S. Sperlich and A. Werwatz, (2004) "Nonparametric and Semiparametric Models", Berlin: Springer.
Hoch, I.(1962) "Estimation of Production Parameters Combining Time-Series and Cross-Section Data" Econometrica 30:34-53
Ivanenko, V. (2003) "Credit Rationing and the Shadow Value of Money in Trade", mimeo, U Western Ontario.
Kasahara, H. and Rodrique, J. (2004) "Does the Use of Imported Intermediates Increase Productivity? Plant Level Evidence", mimeo, Queen�s University
Levinsohn, J. and Petrin, A. (2003) �"Estimating Production Functions Using Inputs to Control for Unobservables", �Review of Economic Studies 317-342
Matzkin, R.(2003) "�Nonparametric Estimation of Non-Additive Random Functions", �Econometrica 71: 1339-1375.
Mundlak, Y.(1961). �"Empirical Production Function Free of Management Bias", �Journal of Farm Economics 44-56
Olley, S. and Pakes, A.(1996) "�The Dynamics of Productivity in the Telecommunications Equipment Industry", �Econometrica 64:1263-1295
Ozler, S. and Yilmaz, K. (2001) "Does Trade Liberalization Increase Productivity? Plant Level Evidence from Turkish Manufacturing Industry", mimeo, UCLA
Pagan, A. (1986) "Two Stage and Related Estimators and their Applications" Review of Economic Studies 517-538
Pavcnik, N. (2002) �"Trade Liberalization Exit and Productivity Improvements: Evidence from Chilean Plants",�Review of Economic Studies 69: 245-276.
Sivadasan, J. (2004) "Barriers to Entry and Productivity: Micro-Evidence from Indian Manufacturing Sector Reforms" mimeo, Univ. of Chicago.
Topalova, P. (2003) "Trade Liberalization and Firm Productivity: The Case of India", mimeo, MIT
Van Biesebroeck, J. (2003) "�Productivity Dynamics with Technology Choice: An Application to Automobile Assembly"�, Review of Economic Studies 70(1), 167-198.
Wooldridge (2005) "On Estimating Firm-level Production Functions Using Proxy Variables to Control for Unobservables" mimeo, Michigan State University