Download
measuring micro and macro productivity dynamics n.
Skip this Video
Loading SlideShow in 5 Seconds..
Measuring Micro and Macro Productivity Dynamics PowerPoint Presentation
Download Presentation
Measuring Micro and Macro Productivity Dynamics

Measuring Micro and Macro Productivity Dynamics

534 Vues Download Presentation
Télécharger la présentation

Measuring Micro and Macro Productivity Dynamics

- - - - - - - - - - - - - - - - - - - - - - - - - - - E N D - - - - - - - - - - - - - - - - - - - - - - - - - - -
Presentation Transcript

  1. Measuring Micro and Macro Productivity Dynamics Remarks By John Haltiwanger

  2. Overview • Objectives: • Measure productivity at micro and macro levels in consistent fashion • Reallocation dynamics at micro level important for aggregate • Track firm dynamics including entry and exit to measure and analyze importance of static and dynamic allocative efficiency vs. “within firm productivity” growth • Challenges: • TFP difficult to measure • Firm dynamics difficult to measure

  3. Methodological Issues Challenges: 1. Difficult to measure outputs and inputs especially capital a. Capital b. Prices especially at micro level 2. Estimating factor elasticities: a. OLS b. Cost Shares c. Proxy methods (Olley-Pakes; Levinsohn-Petrin) d. IV

  4. Mixed Messages on Challenges… • Labor productivity and TFP often highly correlated • More important to get representative sample and firm dynamics than TFP? • Capital measurement difficult and potentially important for policies/institutions • Price/output measurement difficult given data limitations and very important for positive and normative implications

  5. Source: Haltiwanger and Schweiger (2004)

  6. Source: Haltiwanger and Schweiger (2004)

  7. PRODUCTIVITY SHOCKS • TFP - residual from KLEM production function: where the production function is estimated in logs: Inputs may be correlated w/ productivity, so use IVs: • Output of downstream producers. • Regional governments expenditures. • Energy and materials prices. • Estimated factor elasticities by sector using cost-share approach and results are robust (e.g., correlation between two measures is 0.88 and moments very similar). Source: Eslava et al. (2005)

  8. TABLE 2: PRODUCTION FUNCTION

  9. TABLE 3: DIFFERENT TFP MEASURES

  10. TABLE 6: DETERMINANTS OF EXIT PROBABILITY

  11. U.S. Exit Selection Results Source: Foster, Haltiwanger and Syverson (2005)

  12. Aggregate productivity and allocation • Olley and Pakes (1996) static decomposition: where: N: # of firms in a sector; • The first term is the unweighted average of firm-level productivity, • The second term reflects allocation of resources: do firms with higher productivity have greater market share. • Requires representative cross sectional samples but does not require accurate longitudinal linkages • Cannot quantify directly importance of entry and exit • By construction, cross term takes out country effects so abstracts from some aspects of measurement error

  13. The cross-sectional efficiency of the allocation of activity Source: Bartelsman, Haltiwanger and Scarpetta (2005)

  14. The cross-sectional efficiency of the allocation of activity Source: Bartelsman, Haltiwanger and Scarpetta (2005)

  15. Source: Eslava et al. (2005)

  16. Dynamic decomposition of productivity growth • Advantages: • Explicit measure of contribution of entry and exit • Disadvantages: • Horizon dependent • Experimentation, learning and selection may make especially dynamic economies have a low contribution of net entry at short horizons but high contribution at long horizons

  17. Within-firm productivity growth dominates at five-year horizons in Mfg Source: Bartelsman, Haltiwanger and Scarpetta (2005)

  18. Source: Foster, Haltiwanger and Krizan (2005)

  19. Differences Between continuing, entering and exiting establishments in U.S. Manufacturing Source: Foster, Haltiwanger and Syverson (2005)

  20. Sensitivity of U.S. Manufacturing Decomposition to Prices Source: Foster, Haltiwanger and Syverson (2005)

  21. Guidance? • Micro/macro links critical • Large fraction of level of productivity associated with allocative efficiency • Important contribution of changes in allocative efficiency and/or reallocation/net entry components for productivity growth • Measurement of TFP challenge in general and especially at micro level • Greater weight on representative sample with micro/macro links than TFP vs. Labor productivity? • But measurement matters: • Prices and market structure matter and are often missing piece in micro/macro link