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RESEARCH PRODUCT
An empirical test of marginal productivity theory
Constantin WeiserMartin Biewensubject
Economics and EconometricsEmpirical researchMarginal profitRobust statisticsMarginal productEconomicsEconometricsPartial productivityProduction (economics)Function (mathematics)Residualdescription
We explore an hitherto unused approach to testing marginal productivity theory. Our method rests on the simple idea that, under the assumption of a linear homogeneous production function, residual profits are informative about the discrepancies between factor payments and marginal products. Our empirical application using data on manufacturing plants in Chile suggest moderate deviations from marginal productivity theory which depend on firm size.
| year | journal | country | edition | language |
|---|---|---|---|---|
| 2014-01-28 | Applied Economics |