Advanced Search
MyIDEAS: Login to save this paper or follow this series

Toward a Model of Firm Productivity Dynamics

Contents:

Author Info

  • David Law
  • Bob Buckle
  • Dean Hyslop

    ()
    (The Treasury)

Abstract

A common finding from international research on firm productivity dynamics is that withinfirm productivity dynamics tend to dominate the effects of firm entry and exit on aggregate productivity. The aim of this paper is to explore the suitability of Statistics New Zealand’s Business Demography (BD) and Goods and Services Tax (GST) data as a basis for modelling within-firm productivity dynamics. The paper first analyses and describes the cross-sectional and time-series properties of sales, purchases and a value-added measure of labour productivity. Cross-sectional results reveal a great deal of heterogeneity in average sales, purchases and labour productivity both across and within industries and cohorts. Univariate time-series properties of these variables are remarkably similar and sales and purchases are highly correlated contemporaneously. Transition probabilities are also calculated for movement of firms between quartiles of the labour productivity distribution over varying lengths of time. In order to understand the processes driving the data, a simple statistical model for sales, purchases and value-added per unit of employment is developed to calibrate to the stylised empirical facts. The model does a remarkably good job at mimicking the properties of the BD and GST data.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://www.treasury.govt.nz/publications/research-policy/wp/2006/06-11/twp06-11.pdf
Download Restriction: no

Bibliographic Info

Paper provided by New Zealand Treasury in its series Treasury Working Paper Series with number 06/11.

as in new window
Length: 37 pages
Date of creation: 30 Nov 2006
Date of revision:
Handle: RePEc:nzt:nztwps:06/11

Contact details of provider:
Postal: New Zealand Treasury, PO Box 3724, Wellington, New Zealand
Phone: +64-4-472 2733
Fax: +64-4-473 0982
Web page: http://www.treasury.govt.nz
More information through EDIRC

Related research

Keywords: Firm Productivity; Labour Productivity; Firm Dynamics; New Zealand GST Data; New Zealand Business Demography; Firm Value-added.;

Find related papers by JEL classification:

References

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.:
as in new window
  1. Robert A. Buckle & John A. Carlson, 2000. "Inflation and Asymmetric Price Adjustment," The Review of Economics and Statistics, MIT Press, vol. 82(1), pages 157-160, February.
  2. Timothy Dunne & Mark J. Roberts & Larry Samuelson, 1988. "Patterns of Firm Entry and Exit in U.S. Manufacturing Industries," RAND Journal of Economics, The RAND Corporation, vol. 19(4), pages 495-515, Winter.
  3. John Haltiwanger & Martin N Baily & Eric J Bartelsman, 1994. "Downsizing and Productivity Growth: Myth or Reality?," Working Papers, Center for Economic Studies, U.S. Census Bureau 94-4, Center for Economic Studies, U.S. Census Bureau.
  4. David Law & Nathan McLellan, 2005. "The Contributions from Firm Entry, Exit and Continuation to Labour Productivity Growth in New Zealand," Treasury Working Paper Series, New Zealand Treasury 05/01, New Zealand Treasury.
  5. Duncan Mills & Jason Timmins, 2004. "Firm Dynamics in New Zealand: A Comparative Analysis with OECD Countries," Treasury Working Paper Series, New Zealand Treasury 04/11, New Zealand Treasury.
  6. Buckle, Robert A & Carlson, John A, 1998. "Inflation and Asymmetric Output Adjustments by Firms," Economic Inquiry, Western Economic Association International, Western Economic Association International, vol. 36(2), pages 215-28, April.
  7. Chiara Criscuolo & Jonathan E. Haskel & Matthew J. Slaughter, 2005. "Global Engagement and the Innovation Activities of Firms," NBER Working Papers 11479, National Bureau of Economic Research, Inc.
  8. Lucia Foster & John Haltiwanger & C.J. Krizan, 1998. "Aggregate Productivity Growth: Lessons from Microeconomic Evidence," NBER Working Papers 6803, National Bureau of Economic Research, Inc.
  9. Mare, David & Timmins, Jason, 2007. "Geographic Concentration and Firm Productivity," Occasional Papers 07/1, Ministry of Economic Development, New Zealand.
  10. Mark Doms & Eric J. Bartelsman, 2000. "Understanding Productivity: Lessons from Longitudinal Microdata," Journal of Economic Literature, American Economic Association, American Economic Association, vol. 38(3), pages 569-594, September.
  11. Buckle, Robert A & Meads, Chris S, 1991. "How Do Firms React to Surprising Changes to Demand? A Vector Autoregressive Analysis Using Business Survey Data," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, Department of Economics, University of Oxford, vol. 53(4), pages 451-66, November.
  12. Griliches, Zvi & Regev, Haim, 1995. "Firm productivity in Israeli industry 1979-1988," Journal of Econometrics, Elsevier, Elsevier, vol. 65(1), pages 175-203, January.
  13. David C. Maré, 2005. "Concentration, Specialisation and Agglomeration of firms in New Zealand," Working Papers, Motu Economic and Public Policy Research 05_12, Motu Economic and Public Policy Research.
Full references (including those not matched with items on IDEAS)

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. Fabling, Richard & Grimes, Arthur & Sanderson , Lynda & Stevens, Philip, 2008. "Some Rise by Sin, and Some by Virtue Fall: Firm Dynamics, Market Structure and Performance," Occasional Papers 08/1, Ministry of Economic Development, New Zealand.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:nzt:nztwps:06/11. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Web and Publishing Team, The Treasury).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.