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Productivity growth in industrialized countries

Author

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  • SIMAR, Léopold

    (Institut de Statistique and Center for Operations Research and Econometrics (CORE), Université catholique de Louvain (UCL), Louvain la Neuve, Belgium)

  • WILSON, Paul W.

    (Department of Economics, University of Texas, Austin, Texas 78712 USA)

Abstract

Several recent papers in the American Economic Review examined important questions regarding productivity growth and its sources in industrialized countries: Fare, Grosskopf, Norris, and Zhang (FGNZ),1994 and Ray and Desli (RD), 1997. We examine two sets of issues raised by these papers, and reassess what can be learned about productivity,efficiency and technology from the data used by both papers. The first set of issues are primarily economic in nature. The Malmquist measure of efficiency change was decomposed by FGNZ into measures of "pure efficiency change" and change in scale efficiency. RD offered an alternative decomposition of the Malmquist index in which the FGNZ measure of pure efficiency change appears, but in which both the scale efficiency change and technical change measures differ. But,in RD's alternative decomposition, the component which is supposed to measure changes in returns to scale confounds the different effects of movement of production units in input/output space and changes in the shape of the technology over time. We offer in this paper an alternative decomposition which avoids this problem. The second set of issues we examine concern estimation and inference. We provide a statistical model suggested by the original framework of FGNZ which allows us to estimate confidence intervals and formally test many of the claims made by both papers. The tool we used is the bootstrap methodology of Simar and Wilson (1997a,b).

Suggested Citation

  • SIMAR, Léopold & WILSON, Paul W., 1998. "Productivity growth in industrialized countries," CORE Discussion Papers 1998036, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  • Handle: RePEc:cor:louvco:1998036
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    File URL: https://uclouvain.be/en/research-institutes/immaq/core/dp-1998.html
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    References listed on IDEAS

    as
    1. GIJBELS, Irène & MAMMEN, Enno & PARK, Byeong U. & SIMAR, Léopold, 1997. "On estimation of monotone and concave frontier functions," CORE Discussion Papers 1997031, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    2. Léopold Simar & Paul W. Wilson, 1998. "Sensitivity Analysis of Efficiency Scores: How to Bootstrap in Nonparametric Frontier Models," Management Science, INFORMS, vol. 44(1), pages 49-61, January.
    3. Léopold Simar & Paul Wilson, 1999. "Some Problems with the Ferrier/Hirschberg Bootstrap Idea," Journal of Productivity Analysis, Springer, vol. 11(1), pages 67-80, February.
    4. Chavas, Jean-Paul & Cox, Thomas L, 1990. "A Non-parametric Analysis of Productivity: The Case of U.S. and Japanese Manufacturing," American Economic Review, American Economic Association, vol. 80(3), pages 450-464, June.
    5. Ray, Subhash C & Desli, Evangelia, 1997. "Productivity Growth, Technical Progress, and Efficiency Change in Industrialized Countries: Comment," American Economic Review, American Economic Association, vol. 87(5), pages 1033-1039, December.
    6. Simar, Leopold & Wilson, Paul W., 1999. "Estimating and bootstrapping Malmquist indices," European Journal of Operational Research, Elsevier, vol. 115(3), pages 459-471, June.
    7. Kneip, A & Park, B-U & Simar, L, 1996. "A Note on the Convergence of Nonparametric DEA Efficiency Measures," Papers 9603, Catholique de Louvain - Institut de statistique.
    8. Fare, Rolf & Shawna Grosskopf & Mary Norris & Zhongyang Zhang, 1994. "Productivity Growth, Technical Progress, and Efficiency Change in Industrialized Countries," American Economic Review, American Economic Association, vol. 84(1), pages 66-83, March.
    9. Fare, Rolf & Grosskopf, Shawna & Norris, Mary, 1997. "Productivity Growth, Technical Progress, and Efficiency Change in Industrialized Countries: Reply," American Economic Review, American Economic Association, vol. 87(5), pages 1040-1043, December.
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    Citations

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    Cited by:

    1. Jose Zofio, 2007. "Malmquist productivity index decompositions: a unifying framework," Applied Economics, Taylor & Francis Journals, vol. 39(18), pages 2371-2387.
    2. Alexandra Daskovska & Léopold Simar & Sébastien Bellegem, 2010. "Forecasting the Malmquist productivity index," Journal of Productivity Analysis, Springer, vol. 33(2), pages 97-107, April.
    3. Wang, Ke & Wei, Yi-Ming, 2016. "Sources of energy productivity change in China during 1997–2012: A decomposition analysis based on the Luenberger productivity indicator," Energy Economics, Elsevier, vol. 54(C), pages 50-59.
    4. Sanford Berg & Chen Lin & Valeriy Tsaplin, 2005. "Regulation of State-Owned and Privatized Utilities: Ukraine Electricity Distribution Company Performance," Journal of Regulatory Economics, Springer, vol. 28(3), pages 259-287, November.
    5. Bontemps, Christophe & Nauges, Céline & Réquillart, Vincent & Simioni, Michel, 2012. "Food Safety Regulation and Firm Productivity:Evidence from the French Food Industry," IDEI Working Papers 696, Institut d'Économie Industrielle (IDEI), Toulouse.
    6. Rossi, Martin Antonio & Ruzzier, Christian Alejandro, 2000. "On the regulatory application of efficiency measures," Utilities Policy, Elsevier, vol. 9(2), pages 81-92, June.
    7. Bontemps, Christophe & Nauges, Celine & Requillart, Vincent & Simioni, Michel, 2011. "Technical Change vs Efficiency Change: How do Food Industries Evolve Over Time?," 2011 International Congress, August 30-September 2, 2011, Zurich, Switzerland 114262, European Association of Agricultural Economists.
    8. George E. Halkos & Nickolaos G. Tzeremes, 2015. "Measuring Seaports' Productivity: A Malmquist Productivity Index Decomposition Approach," Journal of Transport Economics and Policy, University of Bath, vol. 49(2), pages 355-376, April.
    9. Mayer, Andreas & Zelenyuk, Valentin, 2014. "Aggregation of Malmquist productivity indexes allowing for reallocation of resources," European Journal of Operational Research, Elsevier, vol. 238(3), pages 774-785.
    10. Cummins, J. David & Xie, Xiaoying, 2008. "Mergers and acquisitions in the US property-liability insurance industry: Productivity and efficiency effects," Journal of Banking & Finance, Elsevier, vol. 32(1), pages 30-55, January.
    11. repec:eee:jomega:v:72:y:2017:i:c:p:1-14 is not listed on IDEAS
    12. repec:eee:ejores:v:261:y:2017:i:3:p:1125-1140 is not listed on IDEAS
    13. Gonzalez, Eduardo & Gascon, Fernando, 2004. "Sources of productivity growth in the Spanish pharmaceutical industry (1994-2000)," Research Policy, Elsevier, vol. 33(5), pages 735-745, July.
    14. David C. Wheelock & Paul W. Wilson, 2003. "Robust nonparametric estimation of efficiency and technical change in U.S. commercial banking," Working Papers 2003-037, Federal Reserve Bank of St. Louis.
    15. repec:eee:eneeco:v:68:y:2017:i:c:p:271-282 is not listed on IDEAS
    16. Anup Kumar Bhandari, 2010. "Total Factor Productivity Growth and Its Decomposition: An Assessment of the Indian Banking Sector in the True Liberalised Era," Working Papers id:3181, eSocialSciences.
    17. World Bank, 2009. "Belarus Agricultural Productivity and Competitiveness : Impact of State Support and Market Intervention," World Bank Other Operational Studies 18897, The World Bank.

    More about this item

    JEL classification:

    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology

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