Fixed Cost, Imperfect Competition and Bias in Technology Measurement: Japan and The United States
Abstract
In many industries, competition is far from perfect and managerial efficiency (or a fixed cost) varies among firms. However, traditional measurement of technological progress assumes perfect competition and no fixed cost. This paper incorporates these two factors in the technological-progress measurement and investigates the biases caused by their omission. We show that if capital growth exceeds non-capital-input growth and that firms earn a positive pure profit, then traditional measurement underestimates the true technological progress. We apply this methodology to Japanese and US industries, and find that imperfect competition and managerial efficiency are important. However, the magnitude of the bias is not large ... Dans de nombreuses industries, la concurrence est loin d'être parfaite, et l'efficience du management (ou de charge fixe) varie selon les entreprises. Cependant, les mesures traditionnelles du progrès technologique impliquent une concurrence parfaite et pas de charge fixe. Ce document incorpore ces deux facteurs dans les mesures du progrès technologique et recherche les distortions causées par leurs omissions. On démontre que, si la croissance du capital est supérieure à celle des autres facteurs, et si les entreprises obtiennent un pur profit, les mesures traditionnelles sous-estiment alors les vrais progrès technologiques. On applique cette méthodologie aux industries japonaises et américaines, et on définit l'importance des imperfections à la concurrence et l'efficience du management. Cependant, l'ampleur des distortions n'est pas énorme ...Download Info
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Paper provided by OECD Publishing in its series OECD Economics Department Working Papers with number 273.Length:
Date of creation: 21 Dec 2000
Date of revision:
Handle: RePEc:oec:ecoaaa:273-en
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Related research
Keywords: technological progress; imperfect competition; fixed cost; managerial efficiency; Japanese and US Industries; progrès technologique; compétition imparfaite; charge fixe; efficience du management; industries japonaises et américaines;Find related papers by JEL classification:
- D20 - Microeconomics - - Production and Organizations - - - General
- D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
- D43 - Microeconomics - - Market Structure and Pricing - - - Oligopoly and Other Forms of Market Imperfection
- L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
- L16 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Industrial Organization and Macroeconomics; Macroeconomic Industrial Structure
- O30 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - General
- O33 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
- O47 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Measurement of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
- O51 - Economic Development, Technological Change, and Growth - - Economywide Country Studies - - - U.S.; Canada
- O53 - Economic Development, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East
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Citations
Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.Cited by:
- Alan J. Auerbach & Maurice Obstfeld, 2003.
"The Case for Open-Market Purchases in a Liquidity Trap,"
NBER Working Papers
9814, National Bureau of Economic Research, Inc.
- Alan Auerbach & Maurice Obstfeld, 2003. "The case for open-market purchases in a liquidity trap," Proceedings, Federal Reserve Bank of San Francisco, issue Mar.
- Alan J. Auerbach & Maurice Obstfeld, 2005. "The Case for Open-Market Purchases in a Liquidity Trap," American Economic Review, American Economic Association, vol. 95(1), pages 110-137, March.
- Auerbach, Alan J. & Obstfeld, Maurice, 2004. "The Case for Open-Market Purchases in a Liquidity Trap," Center for International and Development Economics Research, Working Paper Series qt4tm5h0s3, Center for International and Development Economics Research, Institute for Business and Economic Research, UC Berkeley.
- Auerbach, Alan J. & Obstfeld, Maurice, 2004. "The Case for Open-Market Purchases in a Liquidity Trap," Center for International and Development Economics Research, Working Paper Series qt84s7d8c8, Center for International and Development Economics Research, Institute for Business and Economic Research, UC Berkeley.
- Alan Auerbach & Maurice Obstfeld, 2004. "The Case for Open-Market Purchases in a Liquidity Trap," Macroeconomics 0407009, EconWPA.
- Auerbach, Alan J. & Obstfeld, Maurice, 2004. "The Case for Open-Market Purchases in a Liquidity Trap," Center for International and Development Economics Research, Working Paper Series qt1dn4d9sr, Center for International and Development Economics Research, Institute for Business and Economic Research, UC Berkeley.
- Auerbach, Alan J & Obstfeld, Maurice, 2004. "The Case for Open-Market Purchases in a Liquidity Trap," CEPR Discussion Papers 4447, C.E.P.R. Discussion Papers.
- Emi Nakamura & Masao Nakamura (presenter) & Takanobu Nakajima, 2004. "Measuring Firms’ R&D Effects on Technical Progress: Japan in the 199," Econometric Society 2004 Far Eastern Meetings 414, Econometric Society.
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