Contemporary approaches to the assessment of production functions
Keywords:
production function, total factor productivity, panel data, econometric modelingAbstract
Modeling of production functions and assessment of total factor pro-ductivity are the leading direction of current research.Modeling of pro-duction functions puts forward a number of questions the solution of which dependson the correctness of the results: which variables are used as output and production factors, the choice of the specification of the production function, at which level to conduct aggregation (the level of the industry, firm, region, etc.), which approaches apply to solve specific problems in the econometric estimation, which lead to the distortion of results (endogeneity in assessing factors, selection of firms in the sample, bias estimates et al.). Modern empirical research suggests different approaches to solving the problems of estimation of production functions. However, the unifying factor is the almost widespread use of panel dataduring the researchReferences
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2 Nakamura R. (1985). Agglomeration economies in urban manufacturing, Journal of Urban Economics 17. – P. 108-124.
3 Henderson J.V. (1986). Efficiency of resource usage and city size, Journal of Urban Economics 18. – P. 47-70.
4 Moomaw, Ronald L. and Martin Williams (1991). Total factor productivity growth in manufacturing: further evidence from the states. Journal of Regional Science 31. – P. 17-34.
5 Henderson J.V. (2003). Marshall’s scale economies. Journal of Urban Economics 53 – P. 1-28.
6 Olley S.G., Pakes A. (1996). The dynamics of productivity in the telecommunications equipment industry. Econometrica
64. – P.1263-1297.
7 Levinsohn J., Petrin A. (2003). Estimating production functions using inputs to control for unobservable. Review of Economics Studies 70. – P. 317-341.
8 DeLoeckerJ (2007). Product differentiation, multi-product firms and estimating the impact of trade liberalization on productivity. National Bureau of Economic Research, Working Paper Series 13155.
9 ZviGriliches, Jacques Mairesse (1995). Production functions: the search for identification. NBER, Working paper No
5067.
10 Ackerberg, D.A., C.L. Benkard, S. Berry, A.Pakes (2007). Econometric tools for analyzing market outcomes. Handbook of Econometrics. – Vol. 6(1). – P. 4171-4276. – Amsterdam: North-Holland.
11 Ilke Van Beveren (2012). Total factor productivity estimation: a practical review. Journal of Economic Surveys. – Vol. 26.
– No 1. – P. 98-128.
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