Lizal, Lubomir; Galuščák, Kamil - William Davidson Institute, University of Michigan - 2012
Levinsohn and Petrin (2003) and Wooldridge (2009) approaches, correcting for the measurement error in capital. We show that … measurement error plays a significant role in the size of the estimated capital coefficient. The capital coefficient estimate … approximately doubles (depending on the particular industry) when we control for capital measurement error. Consequently, while the …