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Modeling technical progress and total factor productivity: A plant level example

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  • Edward Kokkelenberg
  • Sang Nguyen

Abstract

Shifts in the production frontier occur because of changes in technology. A model of how a firm learns to use the new technology, or how it adapts from the first production frontier to the second, is suggested. Two different adaptation paths are embodied in a translog cost function and its attendant cost share equations. The paths are the traditional linear time trend and a learning curve. The model is estimated using establishment level data from a non-regulated industry that underwent a technological shift in the time period covered by the data. The learning curve resulted in more plausible estimates of technical progress and total factor productivity growth patterns. A significant finding is that, at the establishment level, all inputs appear to be substitutes. Copyright Kluwer Academic Publishers 1989

Suggested Citation

  • Edward Kokkelenberg & Sang Nguyen, 1989. "Modeling technical progress and total factor productivity: A plant level example," Journal of Productivity Analysis, Springer, vol. 1(1), pages 21-42, March.
  • Handle: RePEc:kap:jproda:v:1:y:1989:i:1:p:21-42
    DOI: 10.1007/BF00161737
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    References listed on IDEAS

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    1. Morrison, Catherine, 1988. "Subequilibrium in the North American Steel Industries: A Study of Short Run Biases from Regulation and Utilisation Fluctuations," Economic Journal, Royal Economic Society, vol. 98(391), pages 390-411, June.
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    Cited by:

    1. Douglas W Dwyer, 1995. "Whittling Away At Productivity Dispersion," Working Papers 95-5, Center for Economic Studies, U.S. Census Bureau.
    2. Joe Mattey, 1993. "Evidence on IO Technology Assumptions From the Longitudinal Research Database," Working Papers 93-8, Center for Economic Studies, U.S. Census Bureau.
    3. Edward Feser, 2004. "A Flexible Test for Agglomeration Economies in Two U.S. Manufacturing Industries," Working Papers 04-14, Center for Economic Studies, U.S. Census Bureau.
    4. Sang V Nguyen & Robert H Mcguckin, 1988. "Public Use Microdata: Disclosure And Usefulness," Working Papers 88-3, Center for Economic Studies, U.S. Census Bureau.
    5. Feser, Edward J., 2001. "A flexible test for agglomeration economies in two US manufacturing industries," Regional Science and Urban Economics, Elsevier, vol. 31(1), pages 1-19, February.
    6. Timothy Dunne & Mark J Roberts, 1993. "The Long-Run Demand for Labor: Estimates From Census Establishment Data," Working Papers 93-13, Center for Economic Studies, U.S. Census Bureau.
    7. Ron Jarmin, 1995. "Using Matched Client And Census Data To Evaluate The Performance Of The Manufacturing Extension Partnership," Working Papers 95-7, Center for Economic Studies, U.S. Census Bureau.
    8. Sang V Nguyen & Robert H Mcguckin & Arnold P Reznek, 1995. "The Impact Of Ownership Change On Employment, Wages, And Labor Productivity In U.S. Manufacturing 1977-87," Working Papers 95-8, Center for Economic Studies, U.S. Census Bureau.

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