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Nonparametric Identification of Production Function, Total Factor Productivity, and Markup from Revenue Data

Author

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  • Hiroyuki Kasahara
  • Yoichi Sugita

Abstract

Commonly used methods of production function estimation assume that a firm’s output quantity can be observed as data, but typical datasets contain only revenue, not output quantity. We examine the nonparametric identification of production function from revenue data when a firm faces a general nonparametric demand function under imperfect competition. Under standard assumptions, we provide the constructive nonparametric identification of various firm-level objects: gross production function, total factor productivity, price markups over marginal costs, output prices, output quantities, a demand system, and a representative consumer’s utility function.

Suggested Citation

  • Hiroyuki Kasahara & Yoichi Sugita, 2020. "Nonparametric Identification of Production Function, Total Factor Productivity, and Markup from Revenue Data," CESifo Working Paper Series 8667, CESifo.
    • Handle: RePEc:ces:ceswps:_8667
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    Citations

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    Cited by:

    1. Paul Schrimpf & Michio Suzuki & Hiroyuki Kasahara, 2015. "Identification and Estimation of Production Function with Unobserved Heterogeneity," 2015 Meeting Papers 924, Society for Economic Dynamics.
    2. HOSONO Kaoru & TAKIZAWA Miho & YAMANOUCHI Kenta, 2022. "Foreign Direct Investment and Markups," Discussion papers 22009, Research Institute of Economy, Trade and Industry (RIETI).
    3. Panon, Ludovic, 2022. "Labor share, foreign demand and superstar exporters," Journal of International Economics, Elsevier, vol. 139(C).
    4. Matsuyama, Kiminori & Ushchev, Philip, 2022. "Destabilizing effects of market size in the dynamics of innovation," Journal of Economic Theory, Elsevier, vol. 200(C).
    5. repec:hal:spmain:info:hdl:2441/5j3i17uo7399t940lrt6h6n545 is not listed on IDEAS
    6. HOSONO Kaoru & TAKIZAWA Miho & YAMANOUCHI Kenta, 2022. "Financial Constraints and Markups," Discussion papers 22012, Research Institute of Economy, Trade and Industry (RIETI).
    7. Matsuyama, Kiminori & Ushchev, Philip, 2022. "Selection and Sorting of Heterogeneous Firms through Competitive Pressures," CEPR Discussion Papers 17092, C.E.P.R. Discussion Papers.
    8. KIKUCHI Shinnosuke, 2024. "Trends in National and Local Market Concentration in Japan: 1980-2020," Discussion papers 24049, Research Institute of Economy, Trade and Industry (RIETI).
    9. repec:hal:wpspec:info:hdl:2441/5j3i17uo7399t940lrt6h6n545 is not listed on IDEAS

    More about this item

    Keywords

    nonparametric identification; production function; markup; total factor productivity; revenue;
    All these keywords.

    JEL classification:

    • C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Semiparametric and Nonparametric Methods: General
    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance

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