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Modelling Technical Progress And Total Factor Productivity: A Plant Level Example

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  • Sang V Nguyen
  • Edward C Kokkelenberg

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.

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File URL: ftp://ftp2.census.gov/ces/wp/1988/CES-WP-88-04.pdf
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Bibliographic Info

Paper provided by Center for Economic Studies, U.S. Census Bureau in its series Working Papers with number 88-4.

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Date of creation: Oct 1988
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Handle: RePEc:cen:wpaper:88-4

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Keywords: CES; economic; research; micro; data; microdata; chief; economist;

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  1. Solow, John L, 1987. "The Capital-Energy Complementarity Debate Revisited," American Economic Review, American Economic Association, American Economic Association, vol. 77(4), pages 605-14, September.
  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, American Economic Association, vol. 66(5), pages 845-57, December.
  4. Diewert, W E, 1980. "Capital and the Theory of Productivity Measurement," American Economic Review, American Economic Association, American Economic Association, vol. 70(2), pages 260-67, May.
  5. Binswanger, Hans P, 1974. "The Measurement of Technical Change Biases with Many Factors of Production," American Economic Review, American Economic Association, American Economic Association, vol. 64(6), pages 964-76, December.
  6. 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, Royal Economic Society, vol. 98(391), pages 390-411, June.
  7. Ross, David R, 1986. "Learning to Dominate," Journal of Industrial Economics, Wiley Blackwell, Wiley Blackwell, vol. 34(4), pages 337-53, June.
  8. Treadway, Arthur B., 1974. "The globally optimal flexible accelerator," Journal of Economic Theory, Elsevier, Elsevier, vol. 7(1), pages 17-39, January.
  9. 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.
  10. Jarque, Carlos M. & Bera, Anil K., 1980. "Efficient tests for normality, homoscedasticity and serial independence of regression residuals," Economics Letters, Elsevier, Elsevier, vol. 6(3), pages 255-259.
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Cited by:
  1. 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, Center for Economic Studies, U.S. Census Bureau 95-8, Center for Economic Studies, U.S. Census Bureau.
  2. Edward Feser, 2004. "A Flexible Test for Agglomeration Economies in Two U.S. Manufacturing Industries," Working Papers, Center for Economic Studies, U.S. Census Bureau 04-14, Center for Economic Studies, U.S. Census Bureau.
  3. Sang V Nguyen & Robert H Mcguckin, 1988. "Public Use Microdata: Disclosure And Usefulness," Working Papers, Center for Economic Studies, U.S. Census Bureau 88-3, Center for Economic Studies, U.S. Census Bureau.
  4. Joe Mattey, 1993. "Evidence on IO Technology Assumptions From the Longitudinal Research Database," Working Papers, Center for Economic Studies, U.S. Census Bureau 93-8, Center for Economic Studies, U.S. Census Bureau.
  5. Dunne, T. & Roberts, M., 1993. "The Long-Run Demand for Labor: Estimates from Census Establishment Data," Papers, Pennsylvania State - Department of Economics 10-93-8, Pennsylvania State - Department of Economics.
  6. Ron Jarmin, 1995. "Using Matched Client And Census Data To Evaluate The Performance Of The Manufacturing Extension Partnership," Working Papers, Center for Economic Studies, U.S. Census Bureau 95-7, Center for Economic Studies, U.S. Census Bureau.
  7. Douglas W Dwyer, 1995. "Whittling Away At Productivity Dispersion," Working Papers, Center for Economic Studies, U.S. Census Bureau 95-5, Center for Economic Studies, U.S. Census Bureau.

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