Firm Market Value and Production Technology

32 Pages Posted: 24 Dec 2014

See all articles by Maoyong Fan

Maoyong Fan

Ball State University - Department of Economics

Simon Firestone

Board of Governors of the Federal Reserve System

Date Written: October 13, 2009

Abstract

This paper estimates the production technology of the U.S. computer industry using firm market value to control for the correlation between inputs and unobservable productivity shocks. We show that firm market value can serve as a proxy for unobservable productivity shocks. We also show that firm market value is robust as a proxy when firm faces uncertainties and capital market imperfections. Empirical results suggest that our firm market value proxy works well for the computer industry.

Suggested Citation

Fan, Maoyong and Firestone, Simon, Firm Market Value and Production Technology (October 13, 2009). International Journal of Industrial Organization, Vol. 28, No. 5, 2010. Available at SSRN: https://ssrn.com/abstract=2542360

Maoyong Fan (Contact Author)

Ball State University - Department of Economics ( email )

Whitinger Business Building, room 201
2000 W. University Ave.
Muncie, IN 47306-0340
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765-285-5741 (Phone)

HOME PAGE: http://https://sites.google.com/site/maoyongfan/home

Simon Firestone

Board of Governors of the Federal Reserve System ( email )

20th Street and Constitution Avenue NW
Washington, DC 20551
United States

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