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A Richer Understanding of Australia's Productivity Performance in the 1990s: Improved Estimates Based Upon Firm‐Level Panel Data

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  • ROBERT BREUNIG
  • MARN‐HEONG WONG

Abstract

Australian industry is characterised by differences across firms, entry of new firms and exit of unsuccessful firms. These facts highlight the inappropriateness of measuring productivity using aggregate production functions based upon representative firms. In this study, we model heterogeneous firms which change over time. We model the interrelationship between productivity shocks, input choices and decisions to cease production. Firm‐level data provides production function estimates for 25 two‐digit Australian industries. A new aggregation method for industry‐level data allows us to separate productivity changes from output composition changes. Our study sheds new light on the Australian productivity performance.

Suggested Citation

  • Robert Breunig & Marn‐Heong Wong, 2008. "A Richer Understanding of Australia's Productivity Performance in the 1990s: Improved Estimates Based Upon Firm‐Level Panel Data," The Economic Record, The Economic Society of Australia, vol. 84(265), pages 157-176, June.
    • Handle: RePEc:bla:ecorec:v:84:y:2008:i:265:p:157-176
    DOI: 10.1111/j.1475-4932.2008.00460.x
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    Cited by:

    1. Gaétan de Rassenfosse & Russell Thomson, 2019. "R&D offshoring and home industry productivity," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 28(6), pages 1497-1513.
    2. Samantha Farmakis‐Gamboni & David Prentice, 2011. "When Does Reducing Union Bargaining Power Increase Productivity? Evidence from the Workplace Relations Act," The Economic Record, The Economic Society of Australia, vol. 87(279), pages 603-616, December.
    3. V. Breunig Robert & Bakhtiari Sasan, 2013. "Outsourcing and Innovation: An Empirical Exploration of the Dynamic Relationship," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 13(1), pages 395-418, April.
    4. Sasan Bakhtiari, 2011. "Size Evolution and Outsourcing: Theory and Evidence from Australian Manufacturing," Discussion Papers 2012-08, School of Economics, The University of New South Wales.
    5. Sasan Bakhtiari, 2020. "Do manufacturing entrepreneurs in Australia have (or develop) a productivity advantage?," Journal of Productivity Analysis, Springer, vol. 53(3), pages 321-338, June.
    6. Sasan Bakhtiari, 2015. "Productivity, outsourcing and exit: the case of Australian manufacturing," Small Business Economics, Springer, vol. 44(2), pages 425-447, February.
    7. Sasan Bakhtiari, 2013. "Firm Size Evolution and Outsourcing," Discussion Papers 2013-07, School of Economics, The University of New South Wales.
    8. Sasan Bakhtiari, 2011. "Efficiency and Outsourcing: Evidence from Australian Manufacturing," Discussion Papers 2012-07, School of Economics, The University of New South Wales.
    9. Sasan Bakhtiari & Robert Breunig, 2012. "Outsourcing and Innovation: An Empirical Study of Causes and Effects," Discussion Papers 2012-35, School of Economics, The University of New South Wales.

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    More about this item

    JEL classification:

    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • L20 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - General
    • C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Semiparametric and Nonparametric Methods: General

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