6533b823fe1ef96bd127eb2f
RESEARCH PRODUCT
Olley–Pakes productivity decomposition: computation and inference
Pekka IlmakunnasMika MalirantaAri Hyytinensubject
Statistics and ProbabilityEconomics and EconometricsHeteroscedasticityproductivitytuottavuusInferenceFrequentist inference0502 economics and businessStatisticsStatistical inferenceEconometricsPoint estimation050207 economics050205 econometrics MathematicsStatistical hypothesis testingpäättelyta112inferenceta51105 social sciencesgeneralized method of momentsAutocovarianceweighted averageFiducial inferenceStatistics Probability and UncertaintySocial Sciences (miscellaneous)description
Summary We show how a moment-based estimation procedure can be used to compute point estimates and standard errors for the two components of the widely used Olley–Pakes decomposition of aggregate (weighted average) productivity. When applied to business level microdata, the procedure allows for autocovariance and heteroscedasticity robust inference and hypothesis testing about, for example, the coevolution of the productivity components in different groups of firms. We provide an application to Finnish firm level data and find that formal statistical inference casts doubt on the conclusions that one might draw on the basis of a visual inspection of the components of the decomposition.
| year | journal | country | edition | language |
|---|---|---|---|---|
| 2016-01-01 | Journal of the Royal Statistical Society Series A: Statistics in Society |