What factors underlie industry differences in research intensity and productivity growth? We develop a multisector growth model using standard parameters to capture the main factors considered in the empirical R&D and productivity growth literature. Along the balanced growth path, we find that the primary factor behind industry differences in productivity growth is the extent to which new knowl...

Static neoclassical framework cannot be applied to model time dependent processes or increasing returns to scale in production. The dynamization of the neoclassical theory of a firm by dynamic optimization, on the other hand, assumes inconsistent profit functions with the former. As a solution to these problems, we present a dynamic theory of a firm consistent with the static neoclassical theor...

A startling fact of firm level productivity analysis is the large and persistent differences in both labour productivity and total factor productivity (TFP) between firms in narrowly defined sectoral classes. The competitiveness of an industry is potentially an important factor explaining this productivity dispersion. The degree of competition has also implications for the measurement of TFP at...

This paper examines the impact of being an innovator on firm productivity in Taiwan. Using a panel of 48794 firms observed over the 1997-2003 period, and distributed across 23 industries, we compute TFP by estimating Translog production functions with conventional K, L, E, M inputs. We evaluate the impact of being an innovator on TFP using propensity score matching. The rationale is that, over ...

In this study we analyze the evolution of operating cost inefficiency for the English and Welsh water industry over the period 1995-2001 by estimating an heteroskedastic stochastic variable cost frontier. The main aim of this paper is to provide an overall picture of the industry cost inefficiency, as we consider both the water and sewerage companies and the smaller water only companies. The ma...

Economies of Scale in European Manufacturing Revisited* We test for internal and external economies of scale in European manufacturing, employing a more disaggregated data set than has been used in earlier analyses. We aim to separate externalities from common business cycle effects. Fifteen European manufacturing industries in France, Germany, Italy and the UK are analysed. We focus on economi...

Reforms and Productivity Dynamics in Chinese State-Owned Enterprises Institutional change has taken place gradually since 1978 for State-Owned Enterprises (SOEs) in the Industrial Sector of China. In this paper we estimate the effect of deep reform (the right to hire and fire labour, buy and sell capital and operate on international markets) on the productivity dynamics of enterprises. Using a ...

We explore the relationship between R. W. Shephard's input distance function (``Cost and Production Functions,'' Princeton Univ. Press, Princeton, 1953) and D. G. Luenberger's benefit function (J. Math. Econ. 21 (1992a), 461 481). We point out that the latter can be recognized in a production context as a directional input distance function which can exhaustively characterize technologies in bo...

In this paper different formulae for the decomposition of aggregate productivity levels and changes are applied to a sample of German manufacturing firms that pertain to 11 different industries at a roughly two-digit level observed over the period 1981-1998. Productivity is measured by a nonparametric frontier function approach. The decompositions of productivity allow for an explanation of the...

In this paper we have attempted to examine aspects of the competitive selection process, firms’ entry, survival and exit, in an important sector of Chinese manufacturing, looking in particular for changes resulting from the latest stage of reform, dubbed the transition to the “socialist market economy”. These dynamic processes may be becoming increasingly important for the continuing growth of ...