IDEAS home Printed from https://ideas.repec.org/p/hhs/osloec/2008_027.html
   My bibliography  Save this paper

Dynamic Analysis of Structural Change and Productivity Measurement

Author

Listed:
  • Førsund, Finn R.

    (Dept. of Economics, University of Oslo)

  • Hjalmarsson, Lennart

    (Department of Economics, University of Gothenburg)

Abstract

A dynamic analysis of structural change is reviewed based on a vintage model of substitutability between inputs including capital before investment, but no substitution possibilities after investment, and ex post production possibilities characterised by fixed input coefficients. Key elements in understanding structural change are the entering of capacity embodying new technology and exiting of capacity no longer able to yield positive quasi-rent. Three production function concepts are identified: the ex ante micro unit production function as relevant when investing in new capacity, the ex post micro production function, and the short-run industry production function giving the production possibilities at the industry level. Productivity measurement, taking these types of production functions into consideration, leads to different interpretations of productivity change than traditional approaches not being clear about which production function concept is used.

Suggested Citation

  • Førsund, Finn R. & Hjalmarsson, Lennart, 2008. "Dynamic Analysis of Structural Change and Productivity Measurement," Memorandum 27/2008, Oslo University, Department of Economics.
    • Handle: RePEc:hhs:osloec:2008_027
    as

    Download full text from publisher

    File URL: https://www.sv.uio.no/econ/english/research/unpublished-works/working-papers/pdf-files/2008/Memo-27-2008.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Diewert, W. Erwin & Fox, Kevin J., 2008. "On the estimation of returns to scale, technical progress and monopolistic markups," Journal of Econometrics, Elsevier, vol. 145(1-2), pages 174-193, July.
    2. Forsund, Finn R & Hjalmarsson, Lennart, 1979. "Generalised Farrell Measures of Efficiency: An Application to Milk Processing in Swedish Dairy Plants," Economic Journal, Royal Economic Society, vol. 89(354), pages 294-315, June.
    3. Fuss, Melvyn & McFadden, Daniel, 1978. "Production Economics: A Dual Approach to Theory and Applications (II): Applications of the Theory of Production," History of Economic Thought Books, McMaster University Archive for the History of Economic Thought, volume 2, number fuss1978a.
    4. Torstein Bye & Erling Erling Holmoy, 2010. "Removing Policy-based Comparative Advantage for Energy Intensive Production: Necessary Adjustments of the Real Exchange Rate and Industry Structure," The Energy Journal, International Association for Energy Economics, vol. 0(Number 1), pages 177-198.
    5. repec:bla:scandj:v:94:y:1992:i:0:p:s211-28 is not listed on IDEAS
    6. Dale W. Jorgenson, 1966. "The Embodiment Hypothesis," Journal of Political Economy, University of Chicago Press, vol. 74(1), pages 1-1.
    7. Eide, E, 1976. "Do New Factories Embody Potential Best Practice Technology?," Empirical Economics, Springer, vol. 1(2), pages 119-127.
    8. Caves, Douglas W & Christensen, Laurits R & Diewert, W Erwin, 1982. "The Economic Theory of Index Numbers and the Measurement of Input, Output, and Productivity," Econometrica, Econometric Society, vol. 50(6), pages 1393-1414, November.
    9. repec:bla:scandj:v:85:y:1983:i:2:p:113-26 is not listed on IDEAS
    10. Fuss, Melvyn & McFadden, Daniel (ed.), 1978. "Production Economics: A Dual Approach to Theory and Applications," Elsevier Monographs, Elsevier, edition 1, number 9780444850133.
    11. Fuss, Melvyn & McFadden, Daniel, 1978. "Production Economics: A Dual Approach to Theory and Applications (I): The Theory of Production," History of Economic Thought Books, McMaster University Archive for the History of Economic Thought, volume 1, number fuss1978.
    12. repec:bla:scandj:v:98:y:1996:i:3:p:365-86 is not listed on IDEAS
    13. Fuss, Melvyn, 1978. "Factor Substitution in Electricity Generation: A Test of the Putty-Clay Hypothesis," Histoy of Economic Thought Chapters, in: Fuss, Melvyn & McFadden, Daniel (ed.),Production Economics: A Dual Approach to Theory and Applications, volume 2, chapter 7, McMaster University Archive for the History of Economic Thought.
    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. Robin C. Sickles & Jiaqi Hao & Chenjun Shang, 2014. "Panel data and productivity measurement: an analysis of Asian productivity trends," Journal of Chinese Economic and Business Studies, Taylor & Francis Journals, vol. 12(3), pages 211-231, August.
    2. Sickles, Robin C. & Hao, Jiaqi & Shang, Chenjun, 2015. "Panel Data and Productivity Measurement," Working Papers 15-018, Rice University, Department of Economics.

    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. F R Førsund & L Hjalmarsson, 2004. "Calculating scale elasticity in DEA models," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 55(10), pages 1023-1038, October.
    2. R. Førsund, Finn & Vislie, Jon, 2011. "From Macro Growth to Disaggregated Production Studies," Memorandum 22/2011, Oslo University, Department of Economics.
    3. Hideyuki Mizobuchi, 2017. "A superlative index number formula for the Hicks-Moorsteen productivity index," Journal of Productivity Analysis, Springer, vol. 48(2), pages 167-178, December.
    4. Van Ha, Nguyen & Kant, Shashi & Maclaren, Virginia, 2008. "Shadow prices of environmental outputs and production efficiency of household-level paper recycling units in Vietnam," Ecological Economics, Elsevier, vol. 65(1), pages 98-110, March.
    5. Hideyuki Mizobuchi, 2016. "A Superlative Index Number Formula for the Hicks-Moorsteen Productivity Index," CEPA Working Papers Series WP032016, School of Economics, University of Queensland, Australia.
    6. W. Erwin Diewert & Kevin J. Fox, 2017. "Decomposing Value Added Growth into Explanatory Factors," Discussion Papers 2017-02, School of Economics, The University of New South Wales.
    7. W. Briec & K. Kerstens, 2009. "Infeasibility and Directional Distance Functions with Application to the Determinateness of the Luenberger Productivity Indicator," Journal of Optimization Theory and Applications, Springer, vol. 141(1), pages 55-73, April.
    8. Vlachou, Andriana & Vassos, Spyros & Andrikopoulos, Andreas, 1996. "Energy and environment: Reducing CO2 emissions from the electric power industry," Journal of Policy Modeling, Elsevier, vol. 18(4), pages 343-376, August.
    9. Walter Briec & Kristiaan Kerstens & Philippe Venden Eeckaut, 2004. "Non-convex Technologies and Cost Functions: Definitions, Duality and Nonparametric Tests of Convexity," Journal of Economics, Springer, vol. 81(2), pages 155-192, February.
    10. Bruno De Borger & Kristiaan Kerstens & Diego Prior & Ignace Van de Woestyne, 2013. "Static efficiency decompositions and capacity utilization: integrating economic and technical capacity notions," Applied Economics, Taylor & Francis Journals, vol. 45(24), pages 3529-3529, August.
    11. Patrik Söderholm, 2000. "Environmental Regulations and Interfuel Substitution in the Power Sector: A Generalized Leontief Model," Energy & Environment, , vol. 11(1), pages 1-23, January.
    12. Hochman, Gal & Zilberman, David, 2015. "The political economy of OPEC," Energy Economics, Elsevier, vol. 48(C), pages 203-216.
    13. George Gelauff & Sjef Ederveen & J.L.M. Pelkmans, 2006. "Assessing subsidiarity," CPB Document 133.rdf, CPB Netherlands Bureau for Economic Policy Analysis.
    14. J. Peter Neary, 2004. "Rationalizing the Penn World Table: True Multilateral Indices for International Comparisons of Real Income," American Economic Review, American Economic Association, vol. 94(5), pages 1411-1428, December.
    15. Paul Schreyer & María Belén Zinni, 2021. "Productivity Measurement, R&D Assets, and Mark‐Ups in OECD Countries," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 67(4), pages 787-809, December.
    16. Färe, Rolf & Mizobuchi, Hideyuki & Zelenyuk, Valentin, 2021. "Hicks neutrality and homotheticity in technologies with multiple inputs and multiple outputs," Omega, Elsevier, vol. 101(C).
    17. Shunsuke Managi, 2010. "Productivity measures and effects from subsidies and trade: an empirical analysis for Japan's forestry," Applied Economics, Taylor & Francis Journals, vol. 42(30), pages 3871-3883.
    18. Diewert, Erwin & Fox, Kevin J., 2019. "Productivity Indexes and National Statistics: Theory, Methods and Challenges," Microeconomics.ca working papers erwin_diewert-2019-8, Vancouver School of Economics, revised 25 Apr 2019.
    19. Briec, Walter & Dumas, Audrey & Kerstens, Kristiaan & Stenger, Agathe, 2022. "Generalised commensurability properties of efficiency measures: Implications for productivity indicators," European Journal of Operational Research, Elsevier, vol. 303(3), pages 1481-1492.
    20. Jean-Guy Devezeaux de Lavergne, 1990. "Chocs pétroliers et industrie : apports récents de l'économétrie de la production," Économie et Prévision, Programme National Persée, vol. 96(5), pages 21-32.

    More about this item

    Keywords

    Structural change; productivity measurement; putty-clay; ex ante production function; short-run industry production function;
    All these keywords.

    JEL classification:

    • C43 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Index Numbers and Aggregation
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • L61 - Industrial Organization - - Industry Studies: Manufacturing - - - Metals and Metal Products; Cement; Glass; Ceramics

    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:hhs:osloec:2008_027. 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: Mari Strønstad Øverås (email available below). General contact details of provider: https://edirc.repec.org/data/souiono.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.