Revisiting Some Productivity Debates

Johannes Van Biesebroeck

No 10065, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Researchers interested in estimating productivity can choose from an array of methodologies, each with its strengths and weaknesses. Methods differ by the assumptions they rely on and imply very different calculations. I compare five widely used techniques: (a) index numbers, (b) data envelopment analysis, and three parametric methods, (c) instrumental variables estimation, (d) stochastic frontiers, and (e) semi-parametric estimation. I compare the estimates directly and evaluate three productivity debates using a panel of manufacturing plants in Colombia. The different methods generate surprisingly similar results. Correlations between alternative productivity estimates are invariably high. All methods confirm that exporters are more productive on average and that only a small portion of the productivity advantage is due to scale economies. Productivity growth is correlated more strongly with export status, frequent investments in capital equipment, and employment of managers than with the use of imported inputs or foreign ownership. On the debate whether aggregate productivity growth is driven by plant-level changes or output share relocation, all methods point to the the importance of plant-level changes, in contrast to results from the U.S.

JEL-codes: C3 O3 (search for similar items in EconPapers)
Date: 2003-11
New Economics Papers: this item is included in nep-eff
Note: PR
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Citations: View citations in EconPapers (67)

Published as Van Biesebroeck, Johannes, 2008. "The Sensitivity of Productivity Estimates," Journal of Business & Economic Statistics, American Statistical Association, vol. 26, pages 311-328.

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Journal Article: The Sensitivity of Productivity Estimates (2008)
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