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Products and productivity

Bernard, Andrew B. and Redding, Stephen and Schott, Peter K. (2009) Products and productivity. Scandinavian Journal of Economics, 111 (4). pp. 681-709. ISSN 1467-9442

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Abstract

When firms make decisions about which product to manufacture at a more disaggregated level than observed in the data, measured firm productivity reflects both characteristics of the firm and attributes of the products that are non-randomly chosen by the firm. This paper develops a model of industry equilibrium in which firms endogenously sort across products and characterizes the resulting bias in measured firm and aggregate productivity. Calibrating the model's parameters, we show that endogenous product selection can have quantitatively important effects on measured firm and aggregate productivity and their response to changes in parameter values

Item Type: Article
Official URL: http://www.wiley.com/bw/journal.asp?ref=0347-0520
Additional Information: © 2009 by John Wiley & Sons, Inc
Subjects: H Social Sciences > HC Economic History and Conditions
Sets: Collections > Economists Online
Research centres and groups > Centre for Economic Performance (CEP)
Departments > Economics
Identification Number: 10.1111/j.1467-9442.2009.01584.x
Date Deposited: 02 Feb 2010 13:46
Last Modified: 04 May 2017 09:36
URI: http://eprints.lse.ac.uk/id/eprint/26895

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