The Impact of Trade Liberalization on Iran's Manufacturing TFP: An Application of Olley -Peaks Approach

Abbas Aminifard, Karim Azarbaijani and Seyed Komail Tayebi
Additional contact information
Abbas Aminifard: Ph.D.'s Student, Department of Economics, University of Isfahan, Iran
Karim Azarbaijani: Associate Professor, Department of Economics, University of Isfahan, Iran
Seyed Komail Tayebi: Associate Professor, Department of Economics, University of Isfahan, Iran

Iranian Economic Review (IER), 2010, vol. 15, issue 1, 101-116

Abstract: Productivity is often computed by approximating the weighted sum of the inputs from the estimation of the Cobb-Douglas production function. Such estimates, however, may suffer from simultaneity and selection biases. Olley and Pakes (1996) introduced a semi-parametric method which allows us to estimate the production function parameters consistently and thus obtain reliable productivity measures by controlling for such biases. This study first reviews this method and then introduces a Stata(10) command to implement it for manufacturing industry in Iran. The results show that material, skill labor and capital play important role in production function and this is increasing return to scale (IRS) by estimation of Olley and Pakes approach versus decreasing return to scale (DRS) by fixed effect. After estimation of production and calculated total factor productivity (TFP), we concluded that the effect of export and exit rate on TFP at manufacturing industry (ISIC 4digits) in Iran is not very considerable to compare to import penetration coefficient and year effect.

Keywords: Simultaneity and production functions; Firm Dynamics; Productivity; Iranian manufacturing industry (search for similar items in EconPapers)
Date: 2010
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
ftp://80.66.179.253/eut/journl/20101-7.pdf (application/pdf)

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:eut:journl:v:15:y:2010:i:1:p:101

Access Statistics for this article

Iranian Economic Review (IER) is currently edited by Dr.Hossien Abbasinejad

More articles in Iranian Economic Review (IER) from Faculty of Economics,University of Tehran.Tehran,Iran Contact information at EDIRC.
Bibliographic data for series maintained by [z.rahimalipour] ().