Linking productivity to trade in the structural estimation of production within UK manufacturing industries

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Title: Linking productivity to trade in the structural estimation of production within UK manufacturing industries
Authors: Rizov, Marian
Walsh, Patrick P.
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Date: Oct-2005
Abstract: We estimate productivity dynamics within 4-digit manufacturing industries, using FAME data on UK Companies, from 1994 to 2003. We extend the algorithm in Olley and Pakes (1996) to allow for a selection bias driven by the Melitz (2003) effect (high productivity types selecting to exporting) to get more consistent and unbiased estimates of the parameters of the production function. We demonstrate a link between trade orientation and productivity within industries that is driven by selection, not by learning. Hence aggregate productivity is driven by market share reallocations amongst companies rather than from improvements in company level productivity.
Type of material: Working Paper
Publisher: Institute for International Integration Studies (IIIS)
Series/Report no.: IIIS Discussion Paper; No. 98
Copyright (published version): Institute for International Integration Studies, 2005
Keywords: SimultaneitySelection (exit and trade) biasesProductivity dynamicsUK manufacturing companies, within 4-digit industrie
Subject LCSH: Manufacturing industries--Great Britain
Great Britain--Commerce
Industrial productivity--Great Britain
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Language: en
Status of Item: Not peer reviewed
Appears in Collections:Politics and International Relations Research Collection
Geary Institute Research Collection

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