IDEAS home Printed from https://ideas.repec.org/p/eti/dpaper/17088.html
   My bibliography  Save this paper

Dispersion and Volatility of TFPQ in Service Industries

Author

Listed:
  • MORIKAWA Masayuki

Abstract

This study, using microdata on narrowly-defined service industries, presents empirical findings on the cross-sectional dispersion and time-series volatility of total factor productivity (TFP). The novelty of this study lies in its use of high-frequency, establishment-level panel data to compare the physical measure of productivity (TFPQ) and revenue-based productivity (TFPR) in the service industries. According to the analysis, first, TFPQ and TFPR are highly correlated with each other in terms of cross-section as well as time-series dimensions. Second, the within-industry dispersion of TFPQ is not necessarily larger than that of TFPR, which differs from past studies on the manufacturing sector. Third, TFPQ dispersion is lower when aggregated industry-level TFPQ is higher, and vice versa. Fourth, service producers with highly volatile TFP are less productive.

Suggested Citation

  • MORIKAWA Masayuki, 2017. "Dispersion and Volatility of TFPQ in Service Industries," Discussion papers 17088, Research Institute of Economy, Trade and Industry (RIETI).
    • Handle: RePEc:eti:dpaper:17088
    as

    Download full text from publisher

    File URL: https://www.rieti.go.jp/jp/publications/dp/17e088.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Giulia Faggio & Kjell G. Salvanes & John Van Reenen, 2010. "The evolution of inequality in productivity and wages: panel data evidence," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 19(6), pages 1919-1951, December.
    2. John Haltiwanger, 2015. "Job Creation, Job Destruction, and Productivity Growth: The Role of Young Businesses," Annual Review of Economics, Annual Reviews, vol. 7(1), pages 341-358, August.
    3. Steven J. Davis & James A. Kahn, 2008. "Interpreting the Great Moderation: Changes in the Volatility of Economic Activity at the Macro and Micro Levels," Journal of Economic Perspectives, American Economic Association, vol. 22(4), pages 155-180, Fall.
    4. Morikawa, Masayuki, 2012. "Demand fluctuations and productivity of service industries," Economics Letters, Elsevier, vol. 117(1), pages 256-258.
    5. Enghin Atalay, 2014. "Materials Prices And Productivity," Journal of the European Economic Association, European Economic Association, vol. 12(3), pages 575-611, June.
    6. Chad Syverson, 2011. "What Determines Productivity?," Journal of Economic Literature, American Economic Association, vol. 49(2), pages 326-365, June.
    7. Serguey Braguinsky & Atsushi Ohyama & Tetsuji Okazaki & Chad Syverson, 2015. "Acquisitions, Productivity, and Profitability: Evidence from the Japanese Cotton Spinning Industry," American Economic Review, American Economic Association, vol. 105(7), pages 2086-2119, July.
    8. Keiko Ito & Sébastien Lechevalier, 2009. "The evolution of the productivity dispersion of firms: a reevaluation of its determinants in the case of Japan," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 145(3), pages 405-429, October.
    9. Lucia Foster & John Haltiwanger & Chad Syverson, 2008. "Reallocation, Firm Turnover, and Efficiency: Selection on Productivity or Profitability?," American Economic Review, American Economic Association, vol. 98(1), pages 394-425, March.
    10. Elizabeth Kremp & Jacques Mairesse, 1992. "Dispersion and Heterogeneity of Firm Performances in Nine French Service Industries, 1984-1987," NBER Chapters, in: Output Measurement in the Service Sectors, pages 461-489, National Bureau of Economic Research, Inc.
    11. Matthias Kehrig, 2011. "The Cyclicality of Productivity Dispersion," 2011 Meeting Papers 484, Society for Economic Dynamics.
    12. Álvaro Escribano & Rodolfo Stucchi, 2014. "Does recession drive convergence in firms’ productivity? Evidence from Spanish manufacturing firms," Journal of Productivity Analysis, Springer, vol. 41(3), pages 339-349, June.
    13. Masayuki Morikawa, 2011. "Economies of Density and Productivity in Service Industries: An Analysis of Personal Service Industries Based on Establishment-Level Data," The Review of Economics and Statistics, MIT Press, vol. 93(1), pages 179-192, February.
    14. Jeremy T. Fox & Valérie Smeets, 2011. "Does Input Quality Drive Measured Differences In Firm Productivity?," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 52(4), pages 961-989, November.
    15. Young Gak Kim & Hyeog Ug Kwon, 2017. "Aggregate and Firm-level Volatility in the Japanese Economy," The Japanese Economic Review, Springer, vol. 68(2), pages 158-172, June.
    16. Lucia Foster & Cheryl Grim & John Haltiwanger & Zoltan Wolf, 2016. "Firm-Level Dispersion in Productivity: Is the Devil in the Details?," American Economic Review, American Economic Association, vol. 106(5), pages 95-98, May.
    17. Hyunbae Chun & Jung-Wook Kim & Randall Morck, 2011. "Varying Heterogeneity among U.S. Firms: Facts and Implications," The Review of Economics and Statistics, MIT Press, vol. 93(3), pages 1034-1052, August.
    18. Zvi Griliches, 1992. "Output Measurement in the Service Sectors," NBER Books, National Bureau of Economic Research, Inc, number gril92-1.
    19. T. Kirk White & Jerome P. Reiter & Amil Petrin, 2012. "Plant-level Productivity and Imputation of Missing Data in U.S. Census Manufacturing Data," NBER Working Papers 17816, National Bureau of Economic Research, Inc.
    20. Oikawa, Koki, 2013. "Cyclical behavior of firm-level volatility: An explanation for the contrast between the United States and Japan," Journal of Macroeconomics, Elsevier, vol. 38(PB), pages 452-464.
    21. Mark Doms & Eric J. Bartelsman, 2000. "Understanding Productivity: Lessons from Longitudinal Microdata," Journal of Economic Literature, American Economic Association, vol. 38(3), pages 569-594, September.
    22. Oulton, Nicholas, 1998. "Competition and the Dispersion of Labour Productivity amongst UK Companies," Oxford Economic Papers, Oxford University Press, vol. 50(1), pages 23-38, January.
    23. KAWAKAMI Atsushi & MIYAGAWA Tsutomu & TAKIZAWA Miho, 2011. "Revisiting Productivity Differences and Firm Turnover: Evidence from product-based TFP measures in the Japanese manufacturing industries," Discussion papers 11064, Research Institute of Economy, Trade and Industry (RIETI).
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Morikawa, Masayuki, 2017. "Impact of Foreign Tourists on Productivity in the Accommodation Industry : A panel data analysis," SSPJ Discussion Paper Series DP17-012, Service Sector Productivity in Japan: Determinants and Policies, Institute of Economic Research, Hitotsubashi University.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. MORIKAWA Masayuki, 2017. "Dispersion and Volatility of TFPQ in Service Industries," Discussion papers 17088, Research Institute of Economy, Trade and Industry (RIETI).
    2. Morikawa, Masayuki, 2017. "Impact of Foreign Tourists on Productivity in the Accommodation Industry : A panel data analysis," SSPJ Discussion Paper Series DP17-012, Service Sector Productivity in Japan: Determinants and Policies, Institute of Economic Research, Hitotsubashi University.
    3. Paul L. E. Grieco & Shengyu Li & Hongsong Zhang, 2016. "Production Function Estimation With Unobserved Input Price Dispersion," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 57(2), pages 665-690, May.
    4. Ballestar, María Teresa & Díaz-Chao, Ángel & Sainz, Jorge & Torrent-Sellens, Joan, 2020. "Knowledge, robots and productivity in SMEs: Explaining the second digital wave," Journal of Business Research, Elsevier, vol. 108(C), pages 119-131.
    5. Giovanni Dosi & Sébastien Lechevalier & Angelo Secchi, 2010. "Interfirm heterogeneity: nature, sources and consequences for industrial dynamics. An introduction," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) hal-00642680, HAL.
    6. Morikawa, Masayuki, 2021. "Price competition vs. quality competition: Evidence from firm surveys," Journal of Economics and Business, Elsevier, vol. 116(C).
    7. Morikawa, Masayuki, 2012. "Population density and efficiency in energy consumption: An empirical analysis of service establishments," Energy Economics, Elsevier, vol. 34(5), pages 1617-1622.
    8. Enghin Atalay, 2014. "Materials Prices And Productivity," Journal of the European Economic Association, European Economic Association, vol. 12(3), pages 575-611, June.
    9. G. Jacob Blackwood & Lucia S. Foster & Cheryl A. Grim & John Haltiwanger & Zoltan Wolf, 2021. "Macro and Micro Dynamics of Productivity: From Devilish Details to Insights," American Economic Journal: Macroeconomics, American Economic Association, vol. 13(3), pages 142-172, July.
    10. Doan, Tinh & Nguyen, Ha, 2013. "Productivity dispersion and the roles of quality of labour input and competition: A case of Vietnamese manufacturing sector," MPRA Paper 48357, University Library of Munich, Germany.
    11. Figal Garone, Lucas & López Villalba, Paula A. & Maffioli, Alessandro & Ruzzier, Christian A., 2020. "Firm-level productivity in Latin America and the Caribbean," Research in Economics, Elsevier, vol. 74(2), pages 186-192.
    12. van Hoorn, André, 2014. "Individualism and the cultural roots of management practices," Journal of Economic Behavior & Organization, Elsevier, vol. 99(C), pages 53-68.
    13. Álvaro Escribano & Rodolfo Stucchi, 2014. "Does recession drive convergence in firms’ productivity? Evidence from Spanish manufacturing firms," Journal of Productivity Analysis, Springer, vol. 41(3), pages 339-349, June.
    14. Chad Syverson, 2011. "What Determines Productivity?," Journal of Economic Literature, American Economic Association, vol. 49(2), pages 326-365, June.
    15. Cheng-wei Chang & Ching-chong Lai & Ting-wei Lai, 2020. "Fiscal stimulus in a simple macroeconomic model of monopolistic competition with firm heterogeneity," The Japanese Economic Review, Springer, vol. 71(3), pages 447-477, July.
    16. Daniela Maggioni, 2013. "Productivity Dispersion and its Determinants: The Role of Import Penetration," Journal of Industry, Competition and Trade, Springer, vol. 13(4), pages 537-561, December.
    17. Eric J. Bartelsman & Zoltan Wolf, 2017. "Measuring Productivity Dispersion," Tinbergen Institute Discussion Papers 17-033/VI, Tinbergen Institute.
    18. Paul L. E. Grieco & Shengyu Li & Hongsong Zhang, 2022. "Input prices, productivity, and trade dynamics: long‐run effects of liberalization on Chinese paint manufacturers," RAND Journal of Economics, RAND Corporation, vol. 53(3), pages 516-560, September.
    19. Heyman, Fredrik & Norbäck, Pehr-Johan & Persson, Lars, 2015. "The Turnaround of Swedish Industry: Reforms, Firm Diversity and Job and Productivity Dynamics," Working Paper Series 1079, Research Institute of Industrial Economics.
    20. Hirokazu Mizobata, 2018. "Firm Heterogeneity and the Dynamics of Credit Rationing in Japan," KIER Working Papers 1000, Kyoto University, Institute of Economic Research.

    More about this item

    JEL classification:

    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • L83 - Industrial Organization - - Industry Studies: Services - - - Sports; Gambling; Restaurants; Recreation; Tourism
    • L84 - Industrial Organization - - Industry Studies: Services - - - Personal, Professional, and Business Services

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eti:dpaper:17088. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: TANIMOTO, Toko (email available below). General contact details of provider: https://edirc.repec.org/data/rietijp.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.