Olley and Pakes‐style Production Function Estimators with Firm Fixed Effects

Lee, Yoonseok; Stoyanov, Andrey; Zubanov, Nick

Olley and Pakes‐style Production Function Estimators with Firm Fixed Effects

Dateien

Lee_2-7v8nlo3lwtzj2.pdfGröße: 2.21 MBDownloads: 616

Datum

2019

Autor:innen

Lee, Yoonseok

Stoyanov, Andrey

Zubanov, Nick

Open Access-Veröffentlichung

Open Access Green

Sammlungen

Wirtschaftswissenschaften

Publikationstyp

Zeitschriftenartikel

Publikationsstatus

Published

Erschienen in

Oxford Bulletin of Economics and Statistics. 2019, 81(1), pp. 79-97. ISSN 0305-9049. eISSN 1468-0084. Available under: doi: 10.1111/obes.12259

Zusammenfassung

We show that control function estimators (CFEs) of the firm production function, such as Olley–Pakes, may be biased when productivity evolves with a firm‐specific intercept, in which case the correctly specified control function will contain a firm‐specific term, omitted in the standard CFEs. We develop an estimator that is free from this bias by introducing firm fixed effects in the control function. Applying our estimator to the data, we find that it outperforms the existing CFEs in terms of capturing persistent unobserved heterogeneity in firm productivity. Our estimator involves minimal modification to the standard CFE procedures and can be easily implemented using common statistical software.

Fachgebiet (DDC)

330 Wirtschaft

Schlagwörter

production function estimators, firm fixed effects

Zitieren

ISO 690

LEE, Yoonseok, Andrey STOYANOV, Nick ZUBANOV, 2019. Olley and Pakes‐style Production Function Estimators with Firm Fixed Effects. In: Oxford Bulletin of Economics and Statistics. 2019, 81(1), pp. 79-97. ISSN 0305-9049. eISSN 1468-0084. Available under: doi: 10.1111/obes.12259

BibTex

@article{Lee2019-02Olley-43321,
  year={2019},
  doi={10.1111/obes.12259},
  title={Olley and Pakes‐style Production Function Estimators with Firm Fixed Effects},
  number={1},
  volume={81},
  issn={0305-9049},
  journal={Oxford Bulletin of Economics and Statistics},
  pages={79--97},
  author={Lee, Yoonseok and Stoyanov, Andrey and Zubanov, Nick}
}

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Universitätsbibliographie

Ja

Begutachtet

Ja