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Products and productivity

Bernard, Andrew B., 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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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:
Additional Information: © 2009 by John Wiley & Sons, Inc
Library of Congress subject classification: H Social Sciences > HC Economic History and Conditions
Journal of Economic Literature Classification System: L - Industrial Organization > L6 - Industry Studies: Manufacturing > L60 - General
D - Microeconomics > D2 - Production and Organizations > D21 - Firm Behavior
L - Industrial Organization > L1 - Market Structure, Firm Strategy, and Market Performance > L11 - Production, Pricing, and Market Structure; Size Distribution of Firms
Sets: Collections > Economists Online
Research centres and groups > Centre for Economic Performance (CEP)
Departments > Economics
Identification Number: UT ISI:000272589900004
Date Deposited: 02 Feb 2010 13:46

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