Materials Prices and Productivity

Atalay, Enghin

doi:10.2139/ssrn.2055816

Cited by 9 publications

(13 citation statements)

References 44 publications

(51 reference statements)

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“…In all industries, the distributions of input prices are quite spread out, indicating that price dispersion is substantial. Our findings are partially corroborated by studies such as Ornaghi () and Atalay (), which observe input prices directly and also find significant dispersion. Since our input prices are quality adjusted and identified through variation in firms expenditure ratios, they suggest that quality differences alone may not fully account for input price dispersion.…”

Section: Application: Colombian Datasupporting

confidence: 87%

“…The results are reported in Table . In all four industries, there is quite high persistence, with mean around 0.75, which is close to the persistence reported in Atalay () where firm‐level input prices and quantities are available. Thus, firms that are able to secure low prices today are likely to be able to secure them again in the future.…”

Section: Application: Colombian Datasupporting

confidence: 81%

“…Our results indicate significant input price dispersion in all industries, providing further indication of the importance of controlling for unobserved price heterogeneity. The recovered distribution and evolution of intermediate prices are similar to that for studies in which input prices are directly observed (e.g., Atalay, ). We also find a positive correlation between intermediate input prices, wages, and productivity, also corroborating earlier studies (Kugler and Verhoogen, ).…”

Section: Introductionsupporting

confidence: 68%

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Production Function Estimation With Unobserved Input Price Dispersion

Grieco

Zhang

2016

Int Economic Review

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We propose a method to consistently estimate production functions in the presence of input price dispersion when intermediate input quantities are not observed. The traditional approach to dealing with unobserved input quantities-using deflated expenditure as a proxy-requires strong assumptions for consistency. Instead, we control for heterogeneous input prices by exploiting the first order conditions of the firm's profit maximization problem. Our approach applies to a wide class of production functions and can be extended to accommodate a variety of heterogeneous intermediate input types. A Monte Carlo study illustrates that the omitted price bias is significant in the traditional approach, while our method consistently recovers the production function parameters. We apply our method to a firm-level data set from Colombian manufacturing industries. The empirical results are consistent with the prediction that the use of expenditure as a proxy for quantities biases the elasticity of substitution downward. Moreover, using our preferred method, we provide evidence of significant input price dispersion and even wider productivity dispersion than is estimated using proxy methods.

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Section: Application: Colombian Datasupporting

confidence: 87%

Section: Application: Colombian Datasupporting

confidence: 81%

Section: Introductionsupporting

confidence: 68%

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Production Function Estimation With Unobserved Input Price Dispersion

Grieco

Zhang

2016

Int Economic Review

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“…However, in practice it is hard to find prices at the firm/plant level that reflect differences in expected rather than chosen prices (Griliches and Mairesse 1999;Ackerberg et al 2007). Therefore, in most datasets, prices capture market power and input/output quality differences rendering them endogenous (Fox and Smeets 2011;Kugler and Verhoogen 2012;Atalay 2014). imposes no specific functional form, nor does it rely on strong assumptions made in alternative proxy variable frameworks, e.g. the assumption of scalar unobservability to invert the proxy demand function (e.g.…”

Section: Total Factor Productivitymentioning

confidence: 99%

Productivity Effects of Internationalisation Through the Domestic Supply Chain: Evidence from Europe

Merlevede

Theodorakopoulos²

2018

SSRN Journal

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This paper analyses whether indirect effects of internationalisation occur through the domestic supply chain. We investigate productivity effects for a given firm resulting from the import or export of intermediate inputs by domestic upstream and downstream industries. Using a rich sample of manufacturing firms in 19 EU countries, we find evidence that domestic access to intermediate inputs that are also destined to foreign countries is associated with higher levels of revenue productivity. Further, our results highlight two common, but important, misspecification biases: ignoring the dynamic nature of productivity and estimating a value-added instead of a gross-output production function.

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“… By comparison, Mairesse and Jaumandreu () report a very small bias in their study of French and Spanish firms. In contrast to these studies, Atalay () estimates TFP using both firm‐level output and materials prices. His study suggests that accounting for materials prices reduces the contribution of net entry to productivity growth, if compared with measures that only account for output prices.…”

mentioning

confidence: 99%

Productivity growth from an international trade perspective

Lewrick

Mohler

Weder

2017

Rev International Economics

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This paper presents a framework to assess the relative importance of three key sources of productivity growth that international trade research focuses on: (1) interindustry specialization; (2) intra-industry reallocation of resources across heterogeneous firms; and (3) technological progress. We illustrate how to apply the framework by deciphering the productivity dynamics of the Swiss manufacturing industry. We find that intra-industry reallocations are the most important source of growth in aggregate total factor productivity, spurred by the productivity growth of large, incumbent firms and the entry of new firms. Inter-industry specialization and general technological progress, nevertheless, remain important supplementary sources of productivity growth. | IN TRO DUCT IO NProductivity growth is a driving force for economic welfare, but what drives productivity? (Neo-) Classical trade models underscore the role of specialization across industries in fostering productivity, while the "new" trade theory highlights the impact of reallocations of resources among firms within industries. A third strand of the trade literature emphasizes the impact of trade on productivityenhancing R&D. 1 How important are these different factors in relative terms? To shed some light on this issue, we develop and apply empirically a framework that decomposes aggregate productivity growth into the contributions from inter-industry and intra-industry reallocations and general technological progress. Our framework builds on those developed in Baily, Hulten, Campbell, Bresnahan, and Caves (1992), Grilliches andRegev (1995), andKrizan (2001). We offer two innovations.First, we extend the static single-industry concept of Olley and Pakes (1996, henceforth OP) to a dynamic multi-industry one. This allows us to evaluate the relative strength of reallocations across as opposed to within industries. The advantage of the OP concept lies in the distinction between changes in Rev Int Econ. 2018;26:339-356.wileyonlinelibrary.com/journal/roie

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Materials Prices and Productivity

Cited by 9 publications

References 44 publications

Production Function Estimation With Unobserved Input Price Dispersion

Production Function Estimation With Unobserved Input Price Dispersion

Productivity Effects of Internationalisation Through the Domestic Supply Chain: Evidence from Europe

Productivity growth from an international trade perspective

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