Measuring Total Factor Productivity Using the Enterprise Surveys : A Methodological Note
Total factor productivity is a key element of economic growth and an important performance metric for policy makers. This note describes the methodology for measuring firm-level total factor productivity using the World Bank's Enterprise Surve...
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| Format: | Working Paper |
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World Bank, Washington, DC
2020
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| Online Access: | http://documents.worldbank.org/curated/en/306091607457083831/Measuring-Total-Factor-Productivity-Using-the-Enterprise-Surveys-A-Methodological-Note http://hdl.handle.net/10986/34913 |
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okr-10986-349132022-09-20T00:09:31Z Measuring Total Factor Productivity Using the Enterprise Surveys : A Methodological Note Francis, David C. Karalashvili, Nona Maemir, Hibret Rodriguez Meza, Jorge TOTAL FACTOR PRODUCTIVITY ENTERPRISE SURVEY ELASTICITY OF OUTPUT ECONOMIC GROWTH COBB-DOUGLAS Total factor productivity is a key element of economic growth and an important performance metric for policy makers. This note describes the methodology for measuring firm-level total factor productivity using the World Bank's Enterprise Surveys cross-country data. It also presents some estimates recovered from the production function. Two versions of the production function are estimated: one Cobb-Douglas, the other a more flexible translog specification. Both estimations are at the two-digit industry level pooling all the Enterprise Surveys data across economies. Evidence is found against using a Cobb-Douglas specification, which is more parsimonious, and in favor of using the flexible translog specification. The resulting firm-level estimates are all published in the Enterprise Surveys database with a unique firm identifier to link to the rest of the Enterprise Surveys data; because the estimates are reliant on new data, they are updated periodically as new Enterprise Surveys data become available. The results show that: (i) median firms operate close to constant returns to scale; (ii) gross-output and value-added production functions provide similar ranking of sectors in terms of output elasticities, capital intensity, and returns to scale; (iii) there is large, firm-level heterogeneity in output elasticities; and (iv) gross-output-based total factor productivity measures are less dispersed than the value-added ones. 2020-12-10T15:49:19Z 2020-12-10T15:49:19Z 2020-12 Working Paper http://documents.worldbank.org/curated/en/306091607457083831/Measuring-Total-Factor-Productivity-Using-the-Enterprise-Surveys-A-Methodological-Note http://hdl.handle.net/10986/34913 English Policy Research Working Paper;No. 9491 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo World Bank World Bank, Washington, DC Publications & Research Publications & Research :: Policy Research Working Paper |
| repository_type |
Digital Repository |
| institution_category |
Foreign Institution |
| institution |
Digital Repositories |
| building |
World Bank Open Knowledge Repository |
| collection |
World Bank |
| language |
English |
| topic |
TOTAL FACTOR PRODUCTIVITY ENTERPRISE SURVEY ELASTICITY OF OUTPUT ECONOMIC GROWTH COBB-DOUGLAS |
| spellingShingle |
TOTAL FACTOR PRODUCTIVITY ENTERPRISE SURVEY ELASTICITY OF OUTPUT ECONOMIC GROWTH COBB-DOUGLAS Francis, David C. Karalashvili, Nona Maemir, Hibret Rodriguez Meza, Jorge Measuring Total Factor Productivity Using the Enterprise Surveys : A Methodological Note |
| relation |
Policy Research Working Paper;No. 9491 |
| description |
Total factor productivity is a key
element of economic growth and an important performance
metric for policy makers. This note describes the
methodology for measuring firm-level total factor
productivity using the World Bank's Enterprise Surveys
cross-country data. It also presents some estimates
recovered from the production function. Two versions of the
production function are estimated: one Cobb-Douglas, the
other a more flexible translog specification. Both
estimations are at the two-digit industry level pooling all
the Enterprise Surveys data across economies. Evidence is
found against using a Cobb-Douglas specification, which is
more parsimonious, and in favor of using the flexible
translog specification. The resulting firm-level estimates
are all published in the Enterprise Surveys database with a
unique firm identifier to link to the rest of the Enterprise
Surveys data; because the estimates are reliant on new data,
they are updated periodically as new Enterprise Surveys data
become available. The results show that: (i) median firms
operate close to constant returns to scale; (ii)
gross-output and value-added production functions provide
similar ranking of sectors in terms of output elasticities,
capital intensity, and returns to scale; (iii) there is
large, firm-level heterogeneity in output elasticities; and
(iv) gross-output-based total factor productivity measures
are less dispersed than the value-added ones. |
| format |
Working Paper |
| author |
Francis, David C. Karalashvili, Nona Maemir, Hibret Rodriguez Meza, Jorge |
| author_facet |
Francis, David C. Karalashvili, Nona Maemir, Hibret Rodriguez Meza, Jorge |
| author_sort |
Francis, David C. |
| title |
Measuring Total Factor Productivity Using the Enterprise Surveys : A Methodological Note |
| title_short |
Measuring Total Factor Productivity Using the Enterprise Surveys : A Methodological Note |
| title_full |
Measuring Total Factor Productivity Using the Enterprise Surveys : A Methodological Note |
| title_fullStr |
Measuring Total Factor Productivity Using the Enterprise Surveys : A Methodological Note |
| title_full_unstemmed |
Measuring Total Factor Productivity Using the Enterprise Surveys : A Methodological Note |
| title_sort |
measuring total factor productivity using the enterprise surveys : a methodological note |
| publisher |
World Bank, Washington, DC |
| publishDate |
2020 |
| url |
http://documents.worldbank.org/curated/en/306091607457083831/Measuring-Total-Factor-Productivity-Using-the-Enterprise-Surveys-A-Methodological-Note http://hdl.handle.net/10986/34913 |
| _version_ |
1764481921481441280 |