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The Residual: On Monitoring and Benchmarking Firms, Industries, and Economies with Respect to Productivity

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  • Bert Balk

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Abstract

Productivity is an important component of profitability, and therefore an important variable for monitoring and benchmarking exercises. This survey discusses the basic accounting model as well as the various measurement problems one gets involved in. By virtue of its structural features, this model is applicable to individual firms and aggregates such as industries or economies.Though the measurement of productivity change and productivity differences is important, still more important is their explanation. Thus, first, this article reviews recent results relating to the decomposition of aggregate productivity change into components due to firm dynamics and intra-firm productivity change, results which were obtained by studying longitudinal enterprise microdata sets. Second, this article reviews a number of methods for decomposing productivity change and productivity differences, whether at the individual firm level or at aggregate level, into partial measures relating to technological change and efficiency change. The combination of both research strategies seems to be a promising undertaking. Copyright Kluwer Academic Publishers 2003

Suggested Citation

  • Bert Balk, 2003. "The Residual: On Monitoring and Benchmarking Firms, Industries, and Economies with Respect to Productivity," Journal of Productivity Analysis, Springer, vol. 20(1), pages 5-47, July.
  • Handle: RePEc:kap:jproda:v:20:y:2003:i:1:p:5-47
    DOI: 10.1023/A:1024817024364
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    References listed on IDEAS

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    1. Hugo Fuentes & Emili Grifell-Tatjé & Sergio Perelman, 2001. "A Parametric Distance Function Approach for Malmquist Productivity Index Estimation," Journal of Productivity Analysis, Springer, vol. 15(2), pages 79-94, March.
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    11. Grosskopf, Shawna & Moutray, Chad, 2001. "Evaluating performance in Chicago public high schools in the wake of decentralization," Economics of Education Review, Elsevier, vol. 20(1), pages 1-14, February.
    12. Zvi Griliches, 1996. "The Discovery of the Residual: A Historical Note," Journal of Economic Literature, American Economic Association, vol. 34(3), pages 1324-1330, September.
    13. James J. Heckman, 2001. "Micro Data, Heterogeneity, and the Evaluation of Public Policy: Nobel Lecture," Journal of Political Economy, University of Chicago Press, vol. 109(4), pages 673-748, August.
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    JEL classification:

    • C44 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Operations Research; Statistical Decision Theory
    • M - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics
    • M31 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Marketing and Advertising - - - Marketing

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