The Dynamics of Productivity Change: A Review of the Bottom-Up Approach

67 Pages Posted: 27 Mar 2015

Date Written: March 26, 2015

Abstract

This paper considers the relation between (total factor) productivity measures for lower level production units and aggregates thereof such as industries, sectors, or entire economies. In particular, this paper contains a review of the so-called bottom-up approach, which takes an ensemble of individual production units, be it industries or enterprises, as the fundamental frame of reference. At the level of industries the various forms of shift-share analysis are reviewed. At the level of enterprises the additional features that must be taken into account are entry (birth) and exit (death) of production units.

Keywords: Producer, productivity, aggregation, decomposition, shift-share analysis, bottom-up approach, index number theory.

JEL Classification: C43, O47.

Suggested Citation

Balk, Bert M., The Dynamics of Productivity Change: A Review of the Bottom-Up Approach (March 26, 2015). Available at SSRN: https://ssrn.com/abstract=2585452 or http://dx.doi.org/10.2139/ssrn.2585452

Bert M. Balk (Contact Author)

RSM Erasmus University ( email )

Burg Oudlaan 50
Rotterdam, 3062 PA
Netherlands

HOME PAGE: http://www.rsm.nl/bbalk

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