Determinants of Total Factor Productivity: Evidence from US Compustat Firms and Triadic Patent Families
International Journal of Economics and Business Research, 10(3), 258-272, 2015
23 Pages Posted: 30 Jun 2019 Last revised: 1 Jul 2019
Date Written: September 25, 2015
This study examines the determinants of total factor productivity (TFP) in US firms. Moreover, the firms' technology diversification and its effects on TFP is explored. This study uses the US Compustat database during the period 1976-2009. The overall results indicate that both firm and industry characteristics can be important factors for TFP. In addition, the determinants of TFP are examined during economic recession and economic growth periods. The results show the firms that their business activities are more related within similar technologies are able to report higher productivity, especially during economic recession periods. As such, firms can monitor productivity for strategic reasons such as corporate planning and organisation improvement. It can also be used for tactical reasons such as project control or controlling performance to budget.
Keywords: firm characteristics, industry characteristics, innovation knowledge, panel data, procyclical factors, countercyclical factors, relatedness measures, total factor productivity, TFP, USA, United States, triadic patents, technology diversification
JEL Classification: D22, D24
Suggested Citation: Suggested Citation