Firm-Level Dispersion in Productivity: Is the Devil in the Details?

Lucia Foster, Cheryl Grim, John Haltiwanger and Zoltán Wolf

American Economic Review, 2016, vol. 106, issue 5, 95-98

Abstract: We explore current interpretations of firm-level dispersion in revenue-based productivity measures. Since revenue function estimates using proxy methods differ from factor elasticities, the residual emerging from this method remains a combination of demand and technical effciency shocks, and is not equal to the concept of revenue productivity that plays an important role in recent literature on misallocation. This has implications for applications where measured revenue productivity dispersion is used as an indicator of misallocation. Our empirical evidence suggests, under iso-elastic demand, measured dispersion may indicate either distortions or variation in demand shocks and technical effciency or all of the above.

JEL-codes: D24 G32 L25 (search for similar items in EconPapers)
Date: 2016
Note: DOI: 10.1257/aer.p20161023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (51)

Downloads: (external link)
https://www.aeaweb.org/articles?id=10.1257/aer.p20161023 (application/pdf)
https://www.aeaweb.org/aer/app/10605/P2016_1023_app.pdf (application/pdf)
https://www.aeaweb.org/aer/ds/10605/P2016_1023_ds.zip (application/zip)
Access to full text is restricted to AEA members and institutional subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:aea:aecrev:v:106:y:2016:i:5:p:95-98

Ordering information: This journal article can be ordered from
https://www.aeaweb.org/journals/subscriptions

Access Statistics for this article

American Economic Review is currently edited by Esther Duflo

More articles in American Economic Review from American Economic Association Contact information at EDIRC.
Bibliographic data for series maintained by Michael P. Albert ().