Estimation of total factor productivity: an analysis of companies in the manufacturing sector in Peru, 2002-2019

Mario Tello ()
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Mario Tello: Pontificia Universidad Católica de Perú

Lecturas de Economía, 2024, issue 102, 51-91

Abstract: This paper estimates and performs a comparative analysis of five methods for estimating the total factorial productivity (TFP) of manufacturing companies in Peru, period 2002-2019. These methods resolve four limitations of the standard OLS estimates of TFP: the simultaneity bias, the 'attrition' bias (or movement of firms), the bias due to the omission of the prices of the companies' products, and multicollinearity between factors of production. The main database for the estimates is the INEI Annual Economic Survey of Companies (INEI-EEA 2024). Among the results that stand out from the estimates are, on the one hand, the increase in the average annual index of the TFP of the sample of companies at an annual variation rate of 5% in the period 2003-2019. On the other hand, the rate of growth of the TFP of companies is associated with the terms of trade and to a much lesser extent with trade agreements.

Keywords: Total factor productivity; Free trade areas; Production factor (search for similar items in EconPapers)
JEL-codes: D24 L60 (search for similar items in EconPapers)
Date: 2024
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DOI: 10.17533/udea.le.n102a356837

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