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Dispersion and Volatility of TFPQ in Service Industries

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  • Morikawa, Masayuki

Abstract

This study, using microdata on narrowly-defined service industries, presents empirical findings on the cross-sectional dispersion and time-series volatility of total factor productivity (TFP). The novelty of this study lies in its use of high-frequency, establishment-level panel data to compare the physical measure of productivity (TFPQ) and revenue-based productivity (TFPR) in the service industries. According to the analysis, first, TFPQ and TFPR are highly correlated with each other in terms of cross-section as well as time-series dimensions. Second, the within-industry dispersion of TFPQ is not larger than that of TFPR, which differs from past studies on the manufacturing sector. Third, TFPQ dispersion is lower when aggregated industry-level TFPQ is higher, and vice versa. Fourth, service producers with highly volatile TFP are less productive.

Suggested Citation

  • Morikawa, Masayuki, 2017. "Dispersion and Volatility of TFPQ in Service Industries," SSPJ Discussion Paper Series DP17-008, Service Sector Productivity in Japan: Determinants and Policies, Institute of Economic Research, Hitotsubashi University.
    • Handle: RePEc:hit:sspjdp:dp17-008
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    Cited by:

    1. Morikawa, Masayuki, 2017. "Impact of Foreign Tourists on Productivity in the Accommodation Industry : A panel data analysis," SSPJ Discussion Paper Series DP17-012, Service Sector Productivity in Japan: Determinants and Policies, Institute of Economic Research, Hitotsubashi University.

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    More about this item

    Keywords

    service industry; TFP; dispersion; volatility;
    All these keywords.

    JEL classification:

    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • L83 - Industrial Organization - - Industry Studies: Services - - - Sports; Gambling; Restaurants; Recreation; Tourism
    • L84 - Industrial Organization - - Industry Studies: Services - - - Personal, Professional, and Business Services

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