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Total Factor Productivity Growth and Technical Change in a Profit Function Framework

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  • Giannis Karagiannis
  • George Mergos

Abstract

This paper develops a framework for measuring and decomposing TFP changes, within the parametric approach, by using directly the estimated parameters of a profit function. Two alternative relationships are derived for measuring and decomposing TFP changes via a profit function based on two alternative definitions of the rate of technical change, i.e., input- and output-based. Initially a long-run equilibrium framework is assumed and then the analysis is extended to the case of temporary equilibrium. The latter framework is applied to US agriculture by estimating a translog profit function and analyzing TFP changes during the period 1948–1994. Copyright Kluwer Academic Publishers 2000

Suggested Citation

  • Giannis Karagiannis & George Mergos, 2000. "Total Factor Productivity Growth and Technical Change in a Profit Function Framework," Journal of Productivity Analysis, Springer, vol. 14(1), pages 31-51, July.
    • Handle: RePEc:kap:jproda:v:14:y:2000:i:1:p:31-51
    DOI: 10.1023/A:1007891811797
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    2. Daniel Schunk & Bruce Hannon, 2004. "Impacts of a carbon tax policy on Illinois grain farms: a dynamic simulation study," Environmental Economics and Policy Studies, Springer;Society for Environmental Economics and Policy Studies - SEEPS, vol. 6(3), pages 221-247, September.
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    4. K. K. Gary Wong & Belton M. Fleisher & Min Qiang Zhao & William H. McGuire, 2022. "Technical progress and induced innovation in China: a variable profit function approach," Journal of Productivity Analysis, Springer, vol. 57(2), pages 177-191, April.
    5. Fox, Kevin J. & Grafton, R. Quentin & Kirkley, James & Squires, Dale, 2003. "Property rights in a fishery: regulatory change and firm performance," Journal of Environmental Economics and Management, Elsevier, vol. 46(1), pages 156-177, July.
    6. Ka Kei Gary Wong & Min Qiang Zhao, 2023. "Induced innovation and its impact on productivity growth in China: a latent variable approach," Empirical Economics, Springer, vol. 65(1), pages 371-399, July.
    7. Glass, Anthony J. & Kenjegalieva, Karligash & Sickles, Robin C. & Weyman-Jones, Thomas, 2018. "The Spatial Efficiency Multiplier and Common Correlated Effects in a Spatial Autoregressive Stochastic Frontier Model," Working Papers 18-003, Rice University, Department of Economics.
    8. Rolf Färe & Giannis Karagiannis, 2014. "Radial and directional measures of the rate of technical change," Journal of Economics, Springer, vol. 112(2), pages 183-199, June.
    9. He, Yan-Qun & Chan, Lai-Kow & Wu, Ming-Lu, 2007. "Balancing productivity and consumer satisfaction for profitability: Statistical and fuzzy regression analysis," European Journal of Operational Research, Elsevier, vol. 176(1), pages 252-263, January.

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