|
|
|
|
||||
|
||||
The Impact of Capital Measurement Error Correction on Firm-Level Production Function EstimationLubomir LizalCharles University in Prague - CERGE-EI (Center for Economic Research and Graduate Education - Economics Institute); Czech National Bank (CNB); University of Michigan at Ann Arbor - The William Davidson Institute Kamil GaluscakCzech National Bank January 27, 2012 William Davidson Institute Working Paper No. 1026 Abstract: Based on a large panel of Czech manufacturing firms, we estimate firm-level production functions in 2003-2007 using the Levinsohn and Petrin (2003) and Wooldridge (2009) approaches, correcting for the measurement error in capital. We show that measurement error plays a significant role in the size of the estimated capital coefficient. The capital coefficient estimate approximately doubles (depending on the particular industry) when we control for capital measurement error. Consequently, while the majority of industries exhibit constant or (in)significantly decreasing returns to scale when the standard methods are used, increasing returns cannot be rejected in some industries when the estimation is corrected for capital measurement error.
Number of Pages in PDF File: 24 Keywords: Measurement error, capital, firm-level data, Czech Republic JEL Classification: C23, C33, D24, O47 working papers seriesDate posted: January 30, 2012Suggested CitationContact Information
|
|
||||||||||||||||||||
© 2013 Social Science Electronic Publishing, Inc. All Rights Reserved.
FAQ
Terms of Use
Privacy Policy
Copyright
This page was processed by apollo5 in 0.610 seconds
