IDEAS home Printed from https://ideas.repec.org/p/pra/mprapa/15973.html
   My bibliography  Save this paper

Econometric Issues and Methods in the Estimation of Production Functions

Author

Listed:
  • Aguirregabiria, Victor

Abstract

This paper discusses the main econometric issues in the identification and estimation of production functions, and reviews recent methods. The main emphasis of the paper is in explaining the role of different identifying assumptions used in alternative estimation methods.

Suggested Citation

  • Aguirregabiria, Victor, 2009. "Econometric Issues and Methods in the Estimation of Production Functions," MPRA Paper 15973, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:15973
    as

    Download full text from publisher

    File URL: https://mpra.ub.uni-muenchen.de/15973/1/MPRA_paper_15973.pdf
    File Function: original version
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Zvi Griliches & Jacques Mairesse, 1995. "Production Functions: The Search for Identification," NBER Working Papers 5067, National Bureau of Economic Research, Inc.
    2. Stephen Bond & Måns Söderbom, 2005. "Adjustment Costs and the Identification of Cobb Douglas Production Functions," Economics Papers 2005-W04, Economics Group, Nuffield College, University of Oxford.
    3. Evans, David S, 1987. "The Relationship between Firm Growth, Size, and Age: Estimates for 100 Manufacturing Industries," Journal of Industrial Economics, Wiley Blackwell, vol. 35(4), pages 567-581, June.
    4. Richard Blundell & Stephen Bond, 2000. "GMM Estimation with persistent panel data: an application to production functions," Econometric Reviews, Taylor & Francis Journals, vol. 19(3), pages 321-340.
    5. Yair Mundlak, 1961. "Empirical Production Function Free of Management Bias," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 43(1), pages 44-56.
    6. Victor Aguirregabiria & Cesar Alonso-Borrego, 2014. "Labor Contracts And Flexibility: Evidence From A Labor Market Reform In Spain," Economic Inquiry, Western Economic Association International, vol. 52(2), pages 930-957, April.
    7. Bond, Stephen & Van Reenen, John, 2007. "Microeconometric Models of Investment and Employment," Handbook of Econometrics, in: J.J. Heckman & E.E. Leamer (ed.), Handbook of Econometrics, edition 1, volume 6, chapter 65, Elsevier.
    8. Sánchez Mangas, Rocío, 2001. "GMM estimation of a production function with panel data : an application to Spanish manufacturing firms," DES - Working Papers. Statistics and Econometrics. WS ws015527, Universidad Carlos III de Madrid. Departamento de Estadística.
    9. Olley, G Steven & Pakes, Ariel, 1996. "The Dynamics of Productivity in the Telecommunications Equipment Industry," Econometrica, Econometric Society, vol. 64(6), pages 1263-1297, November.
    10. James Levinsohn & Amil Petrin, 2003. "Estimating Production Functions Using Inputs to Control for Unobservables," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 70(2), pages 317-341.
    11. Arellano, Manuel & Bover, Olympia, 1995. "Another look at the instrumental variable estimation of error-components models," Journal of Econometrics, Elsevier, vol. 68(1), pages 29-51, July.
    12. Anderson, T. W. & Hsiao, Cheng, 1982. "Formulation and estimation of dynamic models using panel data," Journal of Econometrics, Elsevier, vol. 18(1), pages 47-82, January.
    13. Robinson, Peter M, 1988. "Root- N-Consistent Semiparametric Regression," Econometrica, Econometric Society, vol. 56(4), pages 931-954, July.
    14. Blundell, Richard & Bond, Stephen, 1998. "Initial conditions and moment restrictions in dynamic panel data models," Journal of Econometrics, Elsevier, vol. 87(1), pages 115-143, August.
    15. Ackerberg, Daniel & Caves, Kevin & Frazer, Garth, 2006. "Structural identification of production functions," MPRA Paper 38349, University Library of Munich, Germany.
    16. Yatchew,Adonis, 2003. "Semiparametric Regression for the Applied Econometrician," Cambridge Books, Cambridge University Press, number 9780521812832, September.
    17. Hall, Bronwyn H, 1987. "The Relationship between Firm Size and Firm Growth in the U.S. Manufacturing Sector," Journal of Industrial Economics, Wiley Blackwell, vol. 35(4), pages 583-606, June.
    18. Manuel Arellano & Stephen Bond, 1991. "Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 58(2), pages 277-297.
    19. Stephen Bond & Måns Söderbom, 2005. "Adjustment Costs and the Identification of Cobb Douglas Production Functions," Economics Series Working Papers 2005-W04, University of Oxford, Department of Economics.
    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. repec:dau:papers:123456789/12203 is not listed on IDEAS
    2. Azam Chaudhry, 2010. "A Panel Data Analysis of Electricity Demand in Pakistan," Lahore Journal of Economics, Department of Economics, The Lahore School of Economics, vol. 15(Special E), pages 75-106, September.
    3. M. Akif Arvas & Burak Uyar, 2014. "Exports and Firm Productivity in Turkish Manufacturing: An Olley-Pakes Estimation," International Journal of Economics and Financial Issues, Econjournals, vol. 4(2), pages 243-257.
    4. Audretsch, David B. & Kritikos, Alexander S. & Schiersch, Alexander, 2020. "Microfirms and innovation in the service sector," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 55(4), pages 997-1018.
    5. Piotr Gabrielczak & Tomasz Serwach, 2014. "Produktywnosc a ekspansja miedzynarodowa przedsiebiorstw. Przypadek wojewodztwa lodzkiego / Firms’ productivity and their international expansion. The case of Lodz voivodeship," International Economics, University of Lodz, Faculty of Economics and Sociology, issue 5, pages 7-28, March.
    6. Christophe Nordman & Julia Vaillant, 2013. "Inputs, Gender Roles or Sharing Norms? Assessing the Gender Performance Gap Among Informal Entrepreneurs in Madagascar," Working Papers DT/2013/15, DIAL (Développement, Institutions et Mondialisation).
    7. Rizov, Marian & Davidova, Sophia & Bailey, Alastair, 2019. "Employment effects of CAP payments in the UK non-farm economy," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, pages 147-161.
    8. repec:diw:diwwpp:dp1774 is not listed on IDEAS
    9. Jaison Chireshe, 2021. "Finance and Renewable Energy Development Nexus: Evidence from Sub-Saharan Africa," International Journal of Energy Economics and Policy, Econjournals, vol. 11(1), pages 318-325.
    10. Muscillo, Alessio & Pin, Paolo & Razzolini, Tiziano & Serti, Francesco, 2018. "Does "Network Closure" Beef up Import Premium?," IZA Discussion Papers 12036, Institute of Labor Economics (IZA).
    11. Roman Fossati & Heiko Rachinger, 2021. "Total Factor Productivity: Exploring firms’ dynamics and heterogeneity over the business cycle," Asociación Argentina de Economía Política: Working Papers 4471, Asociación Argentina de Economía Política.
    12. Piras , Romano & Etzo, Ivan & Massidda, Carla & Mattana, Paolo, 2021. "A Panel SVAR Analysis of the Long-Run Economic Impacts of Migration," Economia Internazionale / International Economics, Camera di Commercio Industria Artigianato Agricoltura di Genova, vol. 74(2), pages 197-224.
    13. Hirokazu Mizobata, 2018. "Firm Heterogeneity and the Dynamics of Credit Rationing in Japan," KIER Working Papers 1000, Kyoto University, Institute of Economic Research.
    14. David B. Audretsch & Marian Hafenstein & Alexander S. Kritikos & Alexander Schiersch, 2018. "Firm Size and Innovation in the Service Sector," Discussion Papers of DIW Berlin 1774, DIW Berlin, German Institute for Economic Research.
    15. Jaison Chireshe & Matthew K. Ocran, 2020. "Health care expenditure and health outcomes in sub‐Saharan African countries," African Development Review, African Development Bank, vol. 32(3), pages 349-361, September.
    16. Alokesh Barua & Bishwanath Goldar & Himani Sharma & Priyanta Ghosh, 2017. "Do Technological Conditions of Production Explain Industrial Growth? The Indian Manufacturing, 1998–1999 to 2007–2008," Journal of Quantitative Economics, Springer;The Indian Econometric Society (TIES), vol. 15(3), pages 509-541, September.
    17. Chi Huu Nguyen & Christophe J. Nordman, 2018. "Household Entrepreneurship and Social Networks: Panel Data Evidence from Vietnam," Journal of Development Studies, Taylor & Francis Journals, vol. 54(4), pages 594-618, April.
    18. repec:cte:werepe:we1601 is not listed on IDEAS
    19. Richter, Philipp M. & Schiersch, Alexander, 2017. "CO2 emission intensity and exporting: Evidence from firm-level data," European Economic Review, Elsevier, vol. 98(C), pages 373-391.
    20. Piotr Gabrielczak & Tomasz Serwach, 2016. "Firm-level productivity and international expansion of firms from the Lodz Voivodeship," Lodz Economics Working Papers 7/2016, University of Lodz, Faculty of Economics and Sociology.
    21. Sieg, Holger & Zhang, Jipeng, 2012. "The importance of managerial capacity in fundraising: Evidence from land conservation charities," International Journal of Industrial Organization, Elsevier, vol. 30(6), pages 724-734.
    22. Piotr Gabrielczak & Tomasz Serwach, 2014. "The Link between Firm-Level Productivity and Decisions to Export," Theory Methodology Practice (TMP), Faculty of Economics, University of Miskolc, vol. 10(01), pages 3-8.
    23. repec:dau:papers:123456789/14463 is not listed on IDEAS
    24. Germeshausen, Robert, 2018. "The European Union emissions trading scheme and fuel efficiency of fossil fuel power plants in Germany," ZEW Discussion Papers 18-007, ZEW - Leibniz Centre for European Economic Research.

    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. Almeida, Rita & Carneiro, Pedro, 2009. "The return to firm investments in human capital," Labour Economics, Elsevier, vol. 16(1), pages 97-106, January.
    2. Dobbelaere, Sabien & Kiyota, Kozo & Mairesse, Jacques, 2015. "Product and labor market imperfections and scale economies: Micro-evidence on France, Japan and the Netherlands," Journal of Comparative Economics, Elsevier, vol. 43(2), pages 290-322.
    3. Yuriy Gorodnichenko, 2007. "Using Firm Optimization to Evaluate and Estimate Returns to Scale," NBER Working Papers 13666, National Bureau of Economic Research, Inc.
    4. Simon Pröll & Giannis Karagiannis & Klaus Salhofer, 2019. "Advertising and Markups: The Case of the German Brewing Industry," Working Papers 732019, University of Natural Resources and Life Sciences, Vienna, Department of Economics and Social Sciences, Institute for Sustainable Economic Development.
    5. Jinhyung Lee & Jeffrey S. McCullough & Robert J. Town, 2013. "The impact of health information technology on hospital productivity," RAND Journal of Economics, RAND Corporation, vol. 44(3), pages 545-568, September.
    6. Daniel A. Ackerberg & Kevin Caves & Garth Frazer, 2015. "Identification Properties of Recent Production Function Estimators," Econometrica, Econometric Society, vol. 83, pages 2411-2451, November.
    7. repec:zbw:inwedp:732019 is not listed on IDEAS
    8. Petrick, Matin & Kloss, Mathias, 2013. "Identifying Factor Productivity from Micro-data: The case of EU agriculture," Factor Markets Working Papers 144, Centre for European Policy Studies.
    9. Göbel, Christian & Zwick, Thomas, 2009. "Age and productivity: evidence from linked employer employee data," ZEW Discussion Papers 09-020, ZEW - Leibniz Centre for European Economic Research.
    10. Markus Eberhardt & Christian Helmers, 2010. "Untested Assumptions and Data Slicing: A Critical Review of Firm-Level Production Function Estimators," Economics Series Working Papers 513, University of Oxford, Department of Economics.
    11. repec:zbw:iamodp:271870 is not listed on IDEAS
    12. Dostie Benoit & Jayaraman Rajshri, 2012. "Organizational Redesign, Information Technologies and Workplace Productivity," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 12(1), pages 1-41, February.
    13. repec:wsr:wpaper:y:2016:i:165 is not listed on IDEAS
    14. Meri Davlasheridze & Pinar C. Geylani, 2017. "Small Business vulnerability to floods and the effects of disaster loans," Small Business Economics, Springer, vol. 49(4), pages 865-888, December.
    15. Fleisher, Belton M. & Hu, Yifan & Li, Haizheng & Kim, Seonghoon, 2011. "Economic transition, higher education and worker productivity in China," Journal of Development Economics, Elsevier, vol. 94(1), pages 86-94, January.
    16. Nikita Céspedes & María E. Aquije & Alan Sánchez & Rafael Vera Tudela, 2016. "Productividad sectorial en el Perú: un análisis a nivel de firmas," Chapters of Books, in: Nikita Céspedes & Pablo Lavado & Nelson Ramírez Rondán (ed.), Productividad en el Perú: medición, determinantes e implicancias, edition 1, volume 1, chapter 3, pages 70-92, Fondo Editorial, Universidad del Pacífico.
    17. Benoit Dostie, 2011. "Wages, Productivity and Aging," De Economist, Springer, vol. 159(2), pages 139-158, June.
    18. Amoroso, S., 2013. "Heterogeneity of innovative, collaborative, and productive firm-level processes," Other publications TiSEM f5784a49-7053-401d-855d-1, Tilburg University, School of Economics and Management.
    19. Jan De Loecker & Frederic Warzynski, 2012. "Markups and Firm-Level Export Status," American Economic Review, American Economic Association, vol. 102(6), pages 2437-2471, October.
    20. Victor Aguirregabiria & Margaret Slade, 2017. "Empirical models of firms and industries," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 50(5), pages 1445-1488, December.
    21. Petrick, Martin & Kloss, Mathias, 2018. "Identifying Agricultural Factor Productivity from Micro-data: A Review of Approaches with an Application to EU Countries," German Journal of Agricultural Economics, Humboldt-Universitaet zu Berlin, Department for Agricultural Economics, vol. 67(2), June.
    22. François Rycx & Yves Saks & Ilan Tojerow, 2015. "Does Education Raise Productivity and Wages Equally? The Moderating Roles of Age, Gender and Industry," Working Paper Research 281, National Bank of Belgium.
    23. Pavel Vacek, 2010. "Panel Data Evidence on Productivity Spillovers from Foreign Direct Investment: Firm-Level Measures of Backward and Forward Linkages," Working Papers IES 2010/19, Charles University Prague, Faculty of Social Sciences, Institute of Economic Studies, revised Aug 2010.

    More about this item

    Keywords

    Production Function Estimation. Dynamic Panel Data Models. Endogeneity. Sample Selection.;

    JEL classification:

    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • C01 - Mathematical and Quantitative Methods - - General - - - Econometrics

    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:pra:mprapa:15973. 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: Joachim Winter (email available below). General contact details of provider: https://edirc.repec.org/data/vfmunde.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.