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Technology shape, distance to frontier, or frontier shift? Modeling the determinants of TFP growth

Author

Listed:
  • Camilla Mastromarco

    (University of Salento)

  • Angelo Zago

    (Department of Economics (University of Verona))

Abstract

We investigate the determinants of TFP growth of Italian manufacturing firms. Using stochastic frontier techniques, we consider three approaches to take into account the influence of external factors, i.e., the determinants of growth. First, external factors may affect the shape of the technology. Second, they may influence the distance from the frontier. Third, in a novel approach, the external factors influence the technological progress, that is the shift of the frontier. Using a sample of manufacturing firms in 1998-2003, we find that the exports, technological investments and spillovers, public infrastructures, and banking efficiency all have a positive effect on TFP growth. We also find that the first model best fits the data.

Suggested Citation

  • Camilla Mastromarco & Angelo Zago, 2009. "Technology shape, distance to frontier, or frontier shift? Modeling the determinants of TFP growth," Working Papers 57/2009, University of Verona, Department of Economics.
    • Handle: RePEc:ver:wpaper:57/2009
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    More about this item

    Keywords

    TFP; growth accounting; stochastic frontiers; R&D spillovers; banking efficiency; infrastructures;
    All these keywords.

    JEL classification:

    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • H54 - Public Economics - - National Government Expenditures and Related Policies - - - Infrastructures

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