Researchers interested in estimating productivity can choose from an array of methodologies, each with its strengths and weaknesses. Methods differ by the assumptions they rely on and imply very different calculations. I compare five widely used techniques: (a) index numbers, (b) data envelopment analysis, and three parametric methods, (c) instrumental variables estimation, (d) stochastic frontiers, and (e) semi-parametric estimation. I compare the estimates directly and evaluate three productivity debates using a panel of manufacturing plants in Colombia. The different methods generate surprisingly similar results. Correlations between alternative productivity estimates are invariably high. All methods confirm that exporters are more productive on average and that only a small portion of the productivity advantage is due to scale economies. Productivity growth is correlated more strongly with export status, frequent investments in capital equipment, and employment of managers than with the use of imported inputs or foreign ownership. On the debate whether aggregate productivity growth is driven by plant-level changes or output share relocation, all methods point to the the importance of plant-level changes, in contrast to results from the U.S.
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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number
10065.
Length: Date of creation: Nov 2003 Date of revision: Handle: RePEc:nbr:nberwo:10065
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Find related papers by JEL classification: C3 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables O3 - Economic Development, Technological Change, and Growth - - Technological Change
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References listed on IDEAS Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
Acemoglu, Daron & Zilibotti, Fabrizio, 1998.
"Productivity Differences,"
Seminar Papers
660, Stockholm University, Institute for International Economic Studies.
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