A more flexible decomposition of productivity growth

Troy Matheson ()

Applied Economics Letters, 2006, vol. 13, issue 11, 695-698

Abstract: Conventional productivity growth decompositions, such as those of Baily, Bartelsman and Haltiwanger (2001) and Grilliches and Regev (1995), first aggregate each firm's productivity level into an aggregate productivity index, and then allocate aggregate growth back to the firms forming the aggregate. It is shown that this can produce misleading results, and two more flexible decompositions are proposed that are consistent with the superlative Tornqvist productivity growth index.

Date: 2006
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DOI: 10.1080/13504850600903837

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