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Abstract
Firms in the same industry can differ in measured productivity by multiples of 3. Griliches (1957) suggests one explanation: the quality of inputs differs across firms. We add labor market history variables such as experience and firm and industry tenure, as well as general human capital measures such as schooling and sex. We also use the wage bill and worker fixed effects. We show adding human capital variables and the wage bill decreases the ratio of the 90th to 10th productivity quantiles from 3.27 to 2.68 across eight Danish manufacturing and service industries. The productivity dispersion decrease is roughly of the same order of magnitude as some competitive effects found in the literature, but input
quality measures do not explain most productivity dispersion, despite economically large production function coefficients. We find that the wage bill explains as much dispersion as human capital measures.
quality measures do not explain most productivity dispersion, despite economically large production function coefficients. We find that the wage bill explains as much dispersion as human capital measures.
| Original language | English |
|---|---|
| Place of publication | Cambridge, MA |
| Publisher | National Bureau of Economic Research |
| Number of pages | 44 |
| Publication status | Published - Mar 2011 |
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Dive into the research topics of 'Does Input Quality Drive Measured Differences in Firm Productivity?'. Together they form a unique fingerprint.Projects
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The Dynamics of Productivity in Danish and European Manufacturing: Comparing Results across Methods, Countries and Datasets
Smeets, V. (Project manager), Warzynski, F. (Participant), Fox, J. (Participant) & De Loecker, J. (Participant)
01/09/2008 → 31/08/2011
Project: Research