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Modeling technical progress and total factor productivity: A plant level example

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  • Edward Kokkelenberg
  • Sang Nguyen

Abstract

Shifts in the production frontier occur because of changes in technology. A model of how a firm learns to use the new technology, or how it adapts from the first production frontier to the second, is suggested. Two different adaptation paths are embodied in a translog cost function and its attendant cost share equations. The paths are the traditional linear time trend and a learning curve. The model is estimated using establishment level data from a non-regulated industry that underwent a technological shift in the time period covered by the data. The learning curve resulted in more plausible estimates of technical progress and total factor productivity growth patterns. A significant finding is that, at the establishment level, all inputs appear to be substitutes. Copyright Kluwer Academic Publishers 1989

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File URL: http://hdl.handle.net/10.1007/BF00161737
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Bibliographic Info

Article provided by Springer in its journal Journal of Productivity Analysis.

Volume (Year): 1 (1989)
Issue (Month): 1 (March)
Pages: 21-42

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Handle: RePEc:kap:jproda:v:1:y:1989:i:1:p:21-42

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Web page: http://www.springerlink.com/link.asp?id=100296

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  1. Binswanger, Hans P., 1973. "The Measurement Of Technical Change Biases With Many Factors Of Production," Staff Papers 14205, University of Minnesota, Department of Applied Economics.
  2. Kokkelenberg, Edward C & Bischoff, Charles W, 1986. "Expectations and Factor Demand," The Review of Economics and Statistics, MIT Press, vol. 68(3), pages 423-31, August.
  3. Griffin, James M & Gregory, Paul R, 1976. "An Intercountry Translog Model of Energy Substitution Responses," American Economic Review, American Economic Association, vol. 66(5), pages 845-57, December.
  4. Treadway, Arthur B., 1974. "The globally optimal flexible accelerator," Journal of Economic Theory, Elsevier, vol. 7(1), pages 17-39, January.
  5. Diewert, W E, 1980. "Capital and the Theory of Productivity Measurement," American Economic Review, American Economic Association, vol. 70(2), pages 260-67, May.
  6. Ross, David R, 1986. "Learning to Dominate," Journal of Industrial Economics, Wiley Blackwell, vol. 34(4), pages 337-53, June.
  7. Jarque, Carlos M. & Bera, Anil K., 1980. "Efficient tests for normality, homoscedasticity and serial independence of regression residuals," Economics Letters, Elsevier, vol. 6(3), pages 255-259.
  8. Anderson, Richard G & Thursby, Jerry G, 1986. "Confidence Intervals for Elasticity Estimators in Translog Models," The Review of Economics and Statistics, MIT Press, vol. 68(4), pages 647-56, November.
  9. Solow, John L, 1987. "The Capital-Energy Complementarity Debate Revisited," American Economic Review, American Economic Association, vol. 77(4), pages 605-14, September.
  10. Morrison, Catherine, 1988. "Subequilibrium in the North American Steel Industries: A Study of Short Run Biases from Regulation and Utilisation Fluctuations," Economic Journal, Royal Economic Society, vol. 98(391), pages 390-411, June.
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Cited by:
  1. Edward Feser, 2004. "A Flexible Test for Agglomeration Economies in Two U.S. Manufacturing Industries," Working Papers 04-14, Center for Economic Studies, U.S. Census Bureau.
  2. Timothy Dunne & Mark J Roberts, 1993. "The Long-Run Demand for Labor: Estimates From Census Establishment Data," Working Papers 93-13, Center for Economic Studies, U.S. Census Bureau.
  3. Ron Jarmin, 1995. "Using Matched Client And Census Data To Evaluate The Performance Of The Manufacturing Extension Partnership," Working Papers 95-7, Center for Economic Studies, U.S. Census Bureau.
  4. Douglas W Dwyer, 1995. "Whittling Away At Productivity Dispersion," Working Papers 95-5, Center for Economic Studies, U.S. Census Bureau.
  5. Sang V Nguyen & Robert H Mcguckin & Arnold P Reznek, 1995. "The Impact Of Ownership Change On Employment, Wages, And Labor Productivity In U.S. Manufacturing 1977-87," Working Papers 95-8, Center for Economic Studies, U.S. Census Bureau.
  6. Sang V Nguyen & Robert H Mcguckin, 1988. "Public Use Microdata: Disclosure And Usefulness," Working Papers 88-3, Center for Economic Studies, U.S. Census Bureau.
  7. Joe Mattey, 1993. "Evidence on IO Technology Assumptions From the Longitudinal Research Database," Working Papers 93-8, Center for Economic Studies, U.S. Census Bureau.

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