Emerging countries are increasingly concerned with improving their competitiveness and productivity. This Element develops a robust econometric methodology, based on controlling for usual unobservable effects at the firm or plant level. By robust empirical results in total factor productivity (TFP), we mean estimating investment climate (IC) elasticities, or semi-elasticities, with equal signs and similar magnitudes for more than ten different competing TFP measures. The key to achieve similar empirical results for several TFP measures is to avoid having a problem omitted variables, achieved through imputation of large proportions of missing observations in relevant variables (i.e. the capital stock). Furthermore through the use of a new concept of aggregate TFP (tfpIC), that measures the associated IC effects on firms tfp, we are able to make meaningful cross-country firms level productivity comparisons, avoiding the usual problem of comparing 'apples with oranges' that would otherwise occur if we directly compare country's TFP measurements.

This Element develops a robust econometric methodology, based on controlling for usual unobservable effects at the firm or plant level.

Book Information
ISBN 9781108829441
Author Alvaro Escribano
Format Paperback
Page Count 75
Imprint Cambridge University Press
Publisher Cambridge University Press
Weight(grams) 180g
Dimensions(mm) 225mm * 150mm * 10mm