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The shape of aggregate production functions: evidence from estimates of the World Technology Frontier

Author

Listed:
  • Jakub Growiec

    () (Narodowy Bank Polski, Economic Institute
    Warsaw School of Economics, Department of Quantitative Economics)

  • Anna Pajor

    () (Cracow University of Economics, Department of Econometrics and Operations Research)

  • Dorota Gorniak

    () (Alior Bank SA)

  • Artur Predki

    () (Cracow University of Economics, Department of Econometrics and Operations Research)

Abstract

The article estimates the aggregate production function at the World Technology Frontier on the basis of annual data on inputs and output in 19 highly developed OECD countries in 1970–2004. A comparison of results based on Data Envelopment Analysis and Bayesian Stochastic Frontier Analysis uncovers a number of significant discrepancies between nonparametric estimates of the frontier and parametric (Cobb-Douglas and translog) aggregate production functions in terms of implied technical efficiency levels, partial elasticities, returns to scale, and elasticities of substitution.

Suggested Citation

  • Jakub Growiec & Anna Pajor & Dorota Gorniak & Artur Predki, 2015. "The shape of aggregate production functions: evidence from estimates of the World Technology Frontier," Bank i Kredyt, Narodowy Bank Polski, vol. 46(4), pages 299-326.
  • Handle: RePEc:nbp:nbpbik:v:46:y:2015:i:4:p:299-326
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    Cited by:

    1. Jakub Growiec, 2013. "On the measurement of technological progress across countries," Bank i Kredyt, Narodowy Bank Polski, vol. 44(5), pages 467-504.
    2. Jakub Growiec & Anna Pajor & Dorota Gorniak & Artur Predki, 2015. "The shape of aggregate production functions: evidence from estimates of the World Technology Frontier," Bank i Kredyt, Narodowy Bank Polski, vol. 46(4), pages 299-326.
    3. repec:nbp:nbpbik:v:48:y:2017:i:1:p:97-118 is not listed on IDEAS
    4. Kamil Makieła, 2014. "Bayesian Stochastic Frontier Analysis of Economic Growth and Productivity Change in the EU, USA, Japan and Switzerland," Central European Journal of Economic Modelling and Econometrics, CEJEME, vol. 6(3), pages 193-216, September.
    5. repec:psc:journl:v:9:y:2017:i:3:p:243-273 is not listed on IDEAS

    More about this item

    Keywords

    World Technology Frontier; aggregate production function; partial elasticity; returns to scale; substitutability;

    JEL classification:

    • E23 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Production
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence

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