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Heterogeneity of total factor productivity across Latin American countries : evidence from manufacturing firms

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  • Daniel Kapp

    (CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique, PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement)

  • Alan Sánchez

    (Central Bank of Peru - Economic Research Division)

Abstract

We use a firm production function approach to generate estimates of total factor productivity (TFP) and labor productivity in the manufacturing sector for a group of Latin American countries. We exploit these estimates to study the relative position of countries within this sector and to explore the main correlates of firm productivity. We find that while the exact ranking of average TPF is sensitive to the underlying form of the production function, Chile and Argentina average level of TFP is found to be consistenly above that of other countries, while Bolivia firms always appears at the bottom of the distribution. While other aspects matter, the main factors explaining differences in productivity across firms are related to country-level, not firm-level, characteristics.

Suggested Citation

  • Daniel Kapp & Alan Sánchez, 2012. "Heterogeneity of total factor productivity across Latin American countries : evidence from manufacturing firms," Post-Print halshs-00707266, HAL.
    • Handle: RePEc:hal:journl:halshs-00707266
    Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-00707266
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    References listed on IDEAS

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    1. Stephen Bond & Måns Söderbom, 2005. "Adjustment Costs and the Identification of Cobb Douglas Production Functions," Economics Papers 2005-W04, Economics Group, Nuffield College, University of Oxford.
    2. Arne Bigsten & Mans Söderbom, 2006. "What Have We Learned from a Decade of Manufacturing Enterprise Surveys in Africa?," The World Bank Research Observer, World Bank, vol. 21(2), pages 241-265.
    3. Blundell, Richard & Bond, Stephen, 1998. "Initial conditions and moment restrictions in dynamic panel data models," Journal of Econometrics, Elsevier, vol. 87(1), pages 115-143, August.
    4. Yair Mundlak, 1961. "Empirical Production Function Free of Management Bias," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 43(1), pages 44-56.
    5. Fernandes, Ana M., 2008. "Firm Productivity in Bangladesh Manufacturing Industries," World Development, Elsevier, vol. 36(10), pages 1725-1744, October.
    6. Olley, G Steven & Pakes, Ariel, 1996. "The Dynamics of Productivity in the Telecommunications Equipment Industry," Econometrica, Econometric Society, vol. 64(6), pages 1263-1297, November.
    7. Subramanian, Uma & Anderson, William P. & Lee, Kihoon, 2005. "Measuring the impact of the investment climate on total factor productivity : the cases of China and Brazil," Policy Research Working Paper Series 3792, The World Bank.
    8. James Levinsohn & Amil Petrin, 2003. "Estimating Production Functions Using Inputs to Control for Unobservables," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 70(2), pages 317-341.
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    Cited by:

    1. Mathieu-Bolh, Nathalie, 2017. "Can tax reforms help achieve sustainable development?," Resource and Energy Economics, Elsevier, vol. 50(C), pages 135-163.

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    More about this item

    Keywords

    Latin America; Total factor productivity; multi factor productivity; labor productivity; Latin America.; Productivité globale des facteurs; productivité multifactorielle; productivité du travail; Amérique Latine.;
    All these keywords.

    JEL classification:

    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models

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